The Monetary Policy Committee of India’s Central Bank RBI has not made any changes in the policy repo rate. The rate remains the same as earlier at 6.5%. The RBI governor Shaktikanta Das revealed this on 8th December at the RBI MPC meet.
Das gave information when he was talking to the media. He said that the economy of the world was still not at normal levels. He further stated that the economy of our country is resilient and its fundamentals are very strong.
Repo Rate Maintained at the RBI MPC Meet
The MPC Committee decided unanimously to keep the repo rate the same. Das today announced the leading bank RBI’s bi-monthly monetary policy. He said they have kept the repo rate the same as earlier. The rate is maintained at 6.5%.
As a result of this decision and announcement, the Deposit Facility rate is 6.25% as earlier. The bank has not made changes in the Marginal Standing Facility rate. Also, there are no changes in the Bank Rate. The percentage of the former remains at 6.25 per cent while the latter remains at 6.75 per cent.
The repo rate underwent a continuous increase six times previously. It was halted in April 2022.
The rate hike was initiated in May 2022 and continued until February 2023.
Key Points of the MPC Policy
Shaktikanta Das said that the Monetary Policy Committee is going to follow a policy of active disinflation. He has said that the bank has predicted the growth for 2023-2024 to be 7%. It is noteworthy that the earlier growth was estimated at 6.5%, but the growth percentage has now increased, expected to be 7%.
The Monetary Policy Committee meeting was held when inflation was reduced to 4.87% in October 2023. The inflation report is going to be published in the coming week. The Govt. has made it compulsory for RBI to maintain the CPI inflation at the level of 4%.
Impact of Reduced Inflation on Repo Rate Decision at the RBI MPC Meet
The RBI governor emphasised that RBI will be focusing on getting rid of its policy of accommodation. The committee decided to maintain the repo rate as earlier. It was due to the inflation reducing to a target of a level of 2-6% that the RBI had set. The Monetary Policy Committee meeting took place when inflation was reduced to 4.87% in October 2023. The inflation report is scheduled to be published in the coming week.
Our country’s economy has remained good during the 1st six months of the current financial year. Good progress in the manufacturing sector is the reason for India’s economic growth. Also, the excellent performance of the construction industry has made the economy strong.
Despite the inflation not increasing too much, there are worries about food inflation. The cost of food items like onions and tomatoes have risen very high earlier. It may result in an increase in the headline CPI in the next few months.
RBI Committee Decides to Increase the Limit of Some E-Mandates
The upper limit for making money transfers through UPI to hospitals and educational institutions was increased. It was increased to Rs 5 Lakh per transaction. The current limit of the UPI in transactions is Rs 1 Lakh.
The RBI committee also decided to increase the upper limit of e-mandates for some categories. It applies to recurring payments to mutual fund subscriptions. The limit has been increased to Rs 1L. The limit for recurring payments for credit card repayments and premium plans of insurance companies is now Rs 1 Lakh.