The monetary policy committee of the Reserve Bank of India in unanimity decided on keeping the repo rate at 6.5 per cent which is the same as before. The interest rate at which the RBI loans money to other banks is known as the repo rate. The central bank put a freeze on the primary rate of interest owing to the steady decline in the rate of inflation, which remains at an 18-month low. The majority of analysts anticipated the RBI to hold the repo rate steady.
Many nations, especially developed ones, have concerns about inflation, but India has performed an excellent task at managing its course of action in regard to inflation. The repo rate had been halted by the RBI during the first meeting of 2023-2024 in April. With the exception of the standstill in April, the RBI hiked the repo rate by a total of 250 basis points, or 6.5 per cent, beginning May 2022 in an effort to combat inflation.
The monetary policy committee of the Reserve Bank of India (RBI) in unanimity decided on keeping the repo rate at 6.5 per cent which is the same as before. The interest rate at which the RBI loans money to other banks is known as the repo rate. The central bank put a freeze on the primary rate of interest owing to the steady decline in the rate of inflation, which remains at an 18-month low. The majority of analysts anticipated the RBI to hold the repo rate steady.
Many nations, especially developed ones, have concerns about inflation, but India has performed an excellent task at managing its course of action in regard to inflation. The repo rate had been halted by the RBI during the first meeting of 2023-2024 in April. With the exception of the standstill in April, the RBI hiked the repo rate by a total of 250 basis points, or 6.5 per cent, beginning May 2022 in an effort to combat inflation. Increasing interest rates is a tool of monetary policy which often works to control economic demand, which brings about a reduction in the inflation rate.
Retail inflation in India had exceeded the RBI’s 6% objective for three straight quarters and had only been able to do so in November 2022. The RBI appears to have failed to regulate price increases under the flexible inflation targeting strategy provided the CPI-based inflation is beyond the 2–6% range for three consecutive quarters. Addressing the GDP depiction, the RBI anticipates 6.5% GDP growth for India in 2023–2024, with Q1 GDP growth of 8%, Q2 GDP growth of 6.5%, Q3 GDP growth of 6%, and Q4 GDP growth of 5.7%. Shaktikanta Das, governor of the RBI, stated that the central bank considers the risks associated with these GDP statistics to be fairly weighed while studying the monetary policy declaration on Thursday.
According to preliminary estimates recently made public by the National Statistical Office (NSO), real GDP growth for 2022–23 was 7.2% rather than the predicted 7.0%. The administration anticipates a future modification of the GDP figures for 2022–2023. Several world agencies have estimated that India will be among the fastest-growing economies in 2023–2024 regardless of global challenges and more stringent domestic monetary policy, underpinned by strong growth in personal consumption and continuing improvement in private investment.
