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Monetary Policy Committee Decisions: RBI

Monetary Policy Committee Decisions: RBI

Reserve Bank of India (RBI) in its bimonthly Monetary Policy Committee (MPC) Meeting has retained benchmark interest rates unchanged for the 4th time in a row.

  • The MPC kept the policy Repo Rate Unchanged at 6.50%.

Key Highlights of the MPC Meeting:

  • The RBI decided unanimously to keep the policy repo rate unchanged at 6.5% to balance economic growth and inflation control.
  • The RBI retained its real GDP (Gross Domestic Product) growth forecast for 2023-24 at 6.5% and the average CPI inflation forecast for the current fiscal year FY24 at 5.4%.
  • The RBI Governor stressed the commitment to the 4% inflation target and highlighted the importance of being prepared to take timely actions to prevent spillovers from food and fuel price shocks to underlying inflation trends.
  • Liquidity in the system will be actively managed in line with the monetary policy stance.
  • The RBI will undertake Open Market Operations (OMO) sales as necessary. Financial stability is essential for price stability and growth.
  • The RBI announced doubling the lending limits for Gold Loans under the Bullet Repayment Scheme (BRS) for urban cooperative banks to Rs 4 lakh.
  • It has been decided in respect of Urban Cooperative Banks (UCBs) who have met the overall target and sub-targets under the Priority Sector Lending (PSL) as on 31st March, 2023.
  • A BRS is one where a borrower repays interest and the principal amount at the end of a loan tenure without worrying about repayment during the loan tenure.