RBI Monetary Policy June 2023: Relief from the increasing burden of loan and EMI, no change in repo rate this time too

Posted on 8th Jun 2023 by rohit kumar

The Reserve Bank of India (RBI) has announced the new monetary policy today. The Monetary Policy Committee of RBI, which ran from June 6 to 8, has decided not to make any change in the repo rate for the time being. This means that the repo rate will remain at 6.5 percent.

 

Two issues were very important before the Monetary Policy Committee headed by the RBI Governor. Firstly, to control inflation in the country and secondly, to deal with adverse global conditions.

 

This meeting of the Monetary Committee of RBI was very important because of the high retail inflation and the interest rate hike by the central banks of developed countries, especially the US Federal Reserve.

 

no change in the repo rate

The RBI Governor today announced the decisions of the Monetary Committee on the repo rate, reverse repo rate, and other related decisions. Apart from this, the governor also discussed the current domestic and global economic situation. However, before today's announcement, many economists believed that there would be no change in the repo rate this time as well.

 

Big things of RBI governor's address

 

The Monetary Policy Committee has decided to keep the repo rate unchanged at 6.5 percent.

 

Retained growth projection of 6.5 percent for FY24. Growth is expected at 8 percent in Q1 of FY24, 6.5 percent in Q2, 6 percent in Q3, and 5.7 percent in Q4.

 

Retail inflation for FY24 was cut to 5.1 percent from the 5.2 percent estimated earlier.

 

The MPC will continue to take prompt and appropriate policy actions to keep inflation expectations firmly anchored.

 

Headline inflation is above the target of 4 percent and is expected to remain so during the rest of the year.

 

India has sufficient foreign exchange reserves.

 

The monetary policy decision is yielding desired results.

 

The Indian economy and financial sector remain strong and resilient amid unprecedented global headwinds.

 

It is necessary to keep a close and constant watch on the emerging inflation.

 

RBI will be agile in its liquidity management while ensuring adequate resources for the productive needs of the economy.

 

The country's current account deficit is expected to narrow further in the fourth quarter and remains largely manageable for the time being.

 

Global economic activities will slow down due to the geopolitical situation.

Net inflow in non-resident deposits increased to US$ 8 billion in FY23 from US$ 3.2 billion in the previous year.

 

The Indian Rupee has remained stable since January this year.

 

Conditions are favorable to accelerate capital expenditure.

 

RBI has permitted banks to issue Rupay prepaid forex cards.

 

RBI has allowed non-bank companies to issue e-rupee vouchers to expand the reach of e-rupee.

 

RBI will remain vigilant and proactive in dealing with emerging risks to price and financial stability.

 

What is the meaning of not changing the repo rate?

In the decision taken by RBI Governor Shaktikanta Das, once again it has been decided to maintain the ongoing recovery in the country's economy and not to make any change in the repo rate.

 

Let us tell you that in the MPC meeting held in February this year, RBI increased the repo rate by 25 basis points (bps). Earlier, RBI had increased the repo rate by 35 basis points in the December monetary policy review. From May 2022 to February 2023, RBI has increased the repo rate by 250 basis points i.e. 2.5 percent.

 

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