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Bhawna Kothari | 06 Apr 2023

RBI MPC Meet: Repo Rate Remains Unchanged, Inflation Projected At 5.2% In FY24

RBI MPC Meet: Repo Rate Remains Unchanged, Inflation Projected At 5.2% In FY24

In a bi-monthly monetary policy meeting (MPC) on April 6, 2023, the Reserve Bank of India announced that the repo rate would remain unchanged at 6.5 per cent.

RBI Governor Shaktikanta Das said, "The MPC unanimously decided to keep rates unchanged in this meeting with readiness to act if the situation warrants and will not hesitate to act as needed in future meetings."

This decision came as a big relief to borrowers indicating that the EMIs and home loans will likely not increase anytime soon. Notably, the repo rate is the rate at which the RBI lends to other banks.

The RBI also forecasted 6.5 per cent growth in the next fiscal year, up from 6.4 per cent in February. The latest Economic Survey from the Finance Ministry had projected growth of 6-6.8 per cent for 2023-24.

The RBI Governor also announced measures to enhance the forex market, improve payment procedures, and simplify deposit processes.

Here are the top highlights of the RBI Monetary Policy(MPC) Meet:

  • The inflation rate is expected to be 5.2% in the fiscal year 2023-2024. The central bank expects inflation to be 5.1%, 5.4%, 5.4%, and 5.2% in the year's first, second, third, and fourth quarters.

  • RBI predicted the real GDP to grow at 6.5 per cent for FY24.

  • As per the monetary policy report, the nominal exchange rate of the Indian rupee(INR) fluctuated in the range of INR 81-83 per US dollar (USD) in H2. Thus, the baseline assumes an exchange rate of INR 82 for every US dollar, opposite INR 80 in Sept 2022.

  • The Reserve Bank of India proposed linking pre-approved bank credit lines with the Unified Payments Interface to grow the real-time payment network.

  • Local lenders with an IFSC Banking Unit in GIFT City in Gujarat can offer non-deliverable forwards to onshore residents.

  • The crude oil assumption of $85 will be the average for FY24.

  • As part of the RBI's initiative to resolve credit reporting institute grievances - a grievance redressal mechanism has been announced.

  • The Reserve Bank of India will create a web portal to search for unclaimed deposits across banks.

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Also Read: RBI Monetary Policy 2023 Highlights


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