RBI Monetary Policy Today HIGHLIGHTS: Reserve Bank of India Governor Shaktikanta Das-headed Monetary Policy Committee (MPC) announced its decision on the monetary policy on Friday and kept the repo rate unchanged at 6.50 per cent. This is the fifth meeting wherein the MPC decided to maintain the status quo on the repo rate. The MPC last raised this rate by 25 bps to 6.50% at its meeting in February 2023. 5 out 6 MPC members voted in favour of withdrawal of accommodation, said RBI Governor Shaktikanta Das.
“The Reserve Bank of India’s Monetary Policy Committee after a detailed assessment of the evolving macroeconomic developments, has decided unanimously to keep the repo rate unchanged at 6.5 per cent,” said RBI Governor Shaktikanta Das amid India’s better-than-expected economic growth.
RBI Monetary Policy December 2023 LIVE Updates:
“In its 8 December meeting, we expect the MPC to remain on a cautious hold and keep the repo rate unchanged at 6.5 per cent. The central bank may flag risks to inflation from a potential recurrence of food price shocks and its impact on inflation expectations, even as it draws comfort from the moderation in core inflation.
We think the RBI may raise its growth forecast for FY23-24, though only modestly to incorporate the higher-than-expected Q3FY23 GDP growth (the RBI’s Q3 forecast was 6.5 per cent, vs actual 7.6 per cent), and continuing momentum in the current quarter.”
– Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics, Barclays
In December 2022, the MPC increased the policy repo rate under the liquidity adjustment facility (LAF) by 35 basis points to 6.25 per cent.
In the last quarter of FY23, on February 8, the RBI had increased the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points to 6.50 per cent.
The MPC had met in April before that to assess the macroeconomic situation and decided unanimously to keep the policy repo rate unchanged at 6.50 per cent.
Before August, the MPC meeting was held on June 6-8 and the Central Bank had decided unanimously to keep the policy repo rate unchanged at 6.50 per cent. The MPC also decided by a majority of 5 out of 6 members to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth.
Before October, the MPC meeting was held on August 8-10 and the Central Bank had decided to keep the key policy repo rate unchanged at 6.5 percent, maintaining the status quo for the third time in a row. The MPC voted in 5:1 majority to maintain the ‘withdrawal of accommodation’ stance to ensure that inflation progressively aligns with the target, while supporting growth, Shaktikanta Das had said.
The last MPC meeting was held on October 4-6 and the Central Bank had decided to keep the key policy repo rate unchanged at 6.5 percent, maintaining the status quo for the fourth time in a row. The MPC decided by a majority of 5 out of 6 members to remain focussed at withdrawal of accommodation to ensure inflation aligns to the target by supporting growth.
The Monetary Policy Committee (MPC) is composed of three independent members and three members who are part of the RBI. Alongside Governor Shaktikanta Das, RBI officials are Rajiv Ranjan, serving as Executive Director, and Michael Debabrata Patra, as the Deputy Governor. While Shashanka Bhide, Ashima Goyal, and Jayanth R Varma are the external members.
The Monetary Policy Committee meeting headed by RBI Governor Shaktikanta Das ends today and the MPC will announce its decision on repo rate today. RBI Governor Shaktikanta Das will deliver his monetary policy statement at 10:00 am. This can be watched on the official YouTube channel of RBI.
RBI MPC is expected to maintain a hawkish pause and keep the repo rate unchanged at 6.5 per cent. The RBI has raised the repo rate by 250 basis points (bps) since May 2022.