RBI Monetary Policy: Here Are The Key Highlights From The Review

The central bank has retained growth projection at 6.5 per cent for FY24, expects 8 per cent growth in Q1, 6.5 per cent in Q2, 6 per cent in Q3, while 5.7 per cent in Q4

The MPC has cut inflation aim to 5.1 per cent from 5.2 per cent forecast in April policy.

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The six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Thursday kept the policy repo rate unchanged at 6.5 per cent in a unanimous decision. Governor Shaktikanta Das, while announcing the MPC decision, said that the central bank has retained the withdrawal-of-accommodation stance.

This was second time in a row that the RBI opted for a pause in rate hike. The central bank has retained growth projection at 6.5 per cent for FY24, expects 8 per cent growth in Q1, 6.5 per cent in Q2, 6 per cent in Q3, while 5.7 per cent in Q4. "Domestic demand condition remains supportive of growth, while rural demand on revival path," the governor said.

Here are some of the major highlights of the MPC outcome:

• RBI Governor Das said the GDP projection for in FY24 stays unchanged at 6.5 per cent.
• Real GDP growth is projected at 6.5 per cent for FY24, Q1 at 8 per cent , Q2 at 6.5 per cent, Q3 at 6 per cent, and Q4 at 5.7 per cent.
• Das said the headline inflation is still above target and is expected to remain so according to our projections.
• The MPC has cut inflation aim to 5.1 per cent from 5.2 per cent forecast in April policy.
• The MPC decided by a majority of five out of six members to remain focused on withdrawal of accommodation.
• Current account deficit (CAD) is likely to have moderated further and should be eminently manageable in 2023-24, the governor said.
• Forex reserves stood at at $595.1 billion as on June 2.
• Indian economy and financial sector stand out as resilient. Domestic macro fundamentals are strengthening.
• Pace of global economic activity to decelerate due to geopolitical situation.
• Cooperative lenders will soon be able to do technical write-offs and execute compromise settlements with defaulting borrowers. 
• Das mentioned that the Standing Deposit Facility (SDF) rate remains at 6.25 per cent, while Marginal Standing Facility Rate and Bank Rate also unchanged at 6.75 per cent.