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.