The Reserve Bank of India (RBI) Governor Shaktikanta Das announced that the Monetary Policy Committee (MPC) has unanimously decided to keep the policy repo rate unchanged at 6.50 per cent.
The MPC also decided by a majority of five out of six members to remain focused on ‘withdrawal of accommodation’ to ensure that inflation progressively aligns with the target while supporting growth, the RBI governor said. Das said the headline inflation is above the target of 4 per cent and expected to remain so during the rest of the year.
The pace of global economic activity is expected to decelerate in 2023, the governor said, adding that this is mainly because it is getting dragged down by elevated inflation, tight financial conditions, and geopolitical tensions, which are still continuing.
The pace of monetary tightening has slowed in recent months, but uncertainty remains on its future trajectory, as inflation continues to roll above targets across the world.
RBI governor said that GDP growth in the first fiscal of FY2024 is expected at 8 per cent, followed by 6.5 per cent in Q2, 6 per cent in Q3, and 5.7 per cent in Q4. For the full fiscal of 2023-24, the RBI retained GDP growth projection at 6.5 per cent. However, the central bank lowered retail inflation projection for FY24 to 5.1 per cent, from 5.2 per cent.
