New Delhi: The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) on today opted for a hawkish pause, keeping the repo rate unchanged at 6.5%. The MPC also maintained its stance as “accommodative” while signaling that it will continue to monitor the evolving inflation and growth dynamics.
RBI has lowered the retail inflation projection to 5.1 pc during FY2 from an earlier estimate of 5.2 pc. Headline inflation is above the target of 4 percent and is expected to remain so during the rest of the year.
Governor Shaktikanda Das said that the MPC voted unanimously to leave the repo rate unchanged. Standing Deposit Facility Rate remains at 6.25%, while Marginal Standing Facility Rate and Bank Rate also unchanged at 6.75%, 5 members to 1 of MPC voted to remain focused on withdrawal.
The pause in the rate cycle is expected to aid relief for MSME borrowers who are yet to recover from pandemic stress and the higher cost of borrowing. As RBI is evaluating trends in inflation and the movement of high-frequency indicators and global developments, it retained the FY24 GDP growth forecast at 6.5% and expects FY24 CPI inflation to be 5.1%.
In its policy statement, the Reserve Bank of India tweeted, “Post Monetary Policy Press Conference by Shaktikanta Das, RBI Governor- June 8, 2023”.