Monetary Policy Bi Monthly report - April 2023 - CSEET Current affairs

Bimonthly RBI monetary policy: MPC keeps repo rate unchanged at 6.50%

The Reserve Bank of India has announced its bimonthly monetary policy and kept the repo rate unchanged at 6.50 per cent. The RBI’s Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged at 6.50 per cent, governor Shaktikanta Das said, announcing the statement of monetary policy, the first in the current financial year. Economic activity remains resilient, and real GDP growth is expected to have been 7 per cent in FY 22-23. The RBI Governor also said that the withdrawal of accommodation and that the repo rate hike has been paused only for this meeting. The next meeting of the MPC is scheduled during June 6-8, 2023.

Bimonthly RBI monetary policy: RBI Rates

• Policy Repo Rate: 6.50%

• Standing Deposit Facility (SDF): 6.25%

• Marginal Standing Facility Rate: 6.75%

• Bank Rate: 6.75%

• Fixed Reverse Repo Rate: 3.35%

• Cash Reserve Ratio (CRR): 4.50%

• Statutory Liquidity Ratio (SLR): 18.00%

Bimonthly RBI monetary policy: Key points

• All members of the MPC unanimously voted to keep the policy repo rate unchanged at 6.50 per cent.

• Real GDP growth for 2023-24 is projected at 6.5 per cent with Q1:2023-24 at 7.8 per cent; Q2 at 6.2 per cent; Q3 at 6.1 per cent; and Q4 at 5.9 per cent

• Retail inflation is expected to moderate to 5.2 per cent in FY2023-24

• The standing deposit facility (SDF) would remain unchanged at 6.25 per cent, and the marginal standing facility, i.e., the MSF rate, and the bank rate

at 6.75 per cent.

• The RBI’s MPC has raised the repo rate by 250 bps in the last 11 months, from May 2022.

The Monetary Policy Committee

All members of the MPC – Dr. Shashanka Bhide, Dr. Ashima Goyal, Prof. Jayanth R. Varma, Dr. Rajiv Ranjan, Dr. Michael Debabrata Patra and Shri Shaktikanta Das. Section 45ZB of the amended RBI Act, 1934 provides for an empowered six- member monetary policy committee (MPC) to be constituted by the Central Government by notification in the Official Gazette. The first such MPC was constituted on September 29, 2016. The present MPC members, as notified by the Central Government in the Official Gazette of October 5, 2020.