The Reserve Bank of India's Monetary Policy Committee (MPC) in its October review meeting unanimously decided to keep the policy repo rate unchanged at 6.5 per cent.
“The Monetary Policy Committee (MPC) met on 4th, 5th and 6th October 2023. After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, it decided unanimously to keep the policy repo rate unchanged at 6.50 per cent,” RBI Governor Shaktikanta Das said on Friday.
In its past three meetings held in April, June and August, RBI held the repo rate unchanged at 6.5 per cent.
The central bank also retained the GDP growth forecast for the current fiscal at 6.5 per cent with risks evenly balanced.
“Real GDP growth for 2023-24 is projected at 6.5 per cent with Q2 at 6.5 per cent; Q3 at 6.0 per cent; and Q4 at 5.7 per cent. The risks are evenly balanced. Real GDP growth for Q1, 2024-25 is projected at 6.6 per cent,” Das said.
RBI also maintained retail inflation at 5.4 pc for 2023-24.
“While near-term inflation is expected to soften on the back of vegetable price correction, especially in tomatoes, and the reduction in LPG prices, the future trajectory will be conditioned by a number of factors. For kharif crops, the area sown under pulses is below the level a year ago. Kharif onion production needs to be watched closely. Demand supply mismatches in spices are likely to keep these prices at elevated levels,” Das said.
“The inflation trajectory will also be shaped by El Nino conditions and global food and energy prices. Together with global financial market volatility, these factors pose risks to the outlook. Taking into account these factors, CPI inflation is projected at 5.4 per cent for 2023-24, with Q2 at 6.4 per cent, Q3 at 5.6 per cent and Q4 at 5.2 per cent. The risks are evenly balanced. CPI inflation for Q1:2024-25 is projected at 5.2 per cent,” he added.
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