Highlights of RBI’s Monetary Policy meeting

Highlights of RBI’s Monetary Policy meeting

Reserve Bank of India (RBI) Governor Shaktikanta Das announced the bi-monthly monetary policy for the financial year 2023-24.

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) unanimously kept the repo rate unchanged at 6.5 per cent.

There is no big surprise in the recent policy. The tone of the RBI Governor persisted hawkish as he reiterated the central bank’s focus on bringing inflation sustainably down.

Global economy:

RBI Governor indicated that the global economy is slowing under the impact of tight financial conditions, protracted geopolitical tensions and increasing geo-economic fragmentation.

However, he said, domestic economic activity has exhibited resilience on the back of strong demand.

Double the gold loan:

RBI has doubled the gold loan under bullet payment scheme from Rs. 2 lakh to Rs 4 lakh for Urban Cooperative Banks.

Under the bullet payment scheme, the banks are required to maintain a loan-to-value ratio of 75% on the loan amount including the interest.

Fight against inflation continues:

RBI Governor emphasized that the fight against inflation is not over yet and the central bank is targeting inflation at 4 per cent and not between 2-6 per cent.

No change in the growth forecast:

RBI has forecast the GDP growth for FY24 at 6.5 per cent. There is no change in forecast of GDP growth for FY24.

Sales of government securities on the cards:

RBI may consider OMO (open market operation) sales of government securities to manage liquidity consistent with the stance of monetary policy.

New channels for card-on-file tokenization (CoFT):

RBI is proposed for the introduction of card-on-file tokenization (CoFT) creation facilities directly at the issuer bank level.

Question & Answer:

Q1. RBI’s Monetary Policy committee has decided to repo rate at how much percent?

Ans. 6.5%

Q2. How much percent GDP growth forecast by RBI’s MPC for FY24?

Ans. 6.5%

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