RBI leaves policy rates unchanged, RBI Governor says war against inflation has to continue

MUMBAI: Delivering the bimonthly Monetary Policy Statement of the RBI through the RBI’s YouTube channel recently, the RBI Governor Shaktikanta Das has informed that the Monetary Policy Committee has decided unanimously to keep the policy repo rate unchanged at 6.50 per cent with readiness to act, should the situation so warrant. Consequently, the standing deposit facility (SDF) rate will remain unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at6.75percent.

The Governor observed that inflation is above the target and given its current level, the present policy rate can still be regarded as accommodative. Hence, the MPC decided to remain focused on withdrawalofaccommodation.

Noting that economic activity remains resilient amidst global volatility, the Governor informed that India’srealGDPgrowthfor2023-24is projected at 6.5 per cent, with Q1 at 7.8 per cent; Q2 at 6.2 per cent; Q3 at 6.1percent;andQ4at5.9percent.

The Governor informed that CPI inflation is projected to moderate to 5.2 per cent for 2023-24; with Q1 at 5.1 per cent; Q2 at 5.4 per cent; Q3 at 5.4percent;andQ4at5.2percent.

Commenting on Monetary Policy, Mr. Rajiv Agarwal, Operating Partner (Infrastructure), Essar and Managing Director, Essar Ports said, “The decision of the ReserveBankofIndiatoincreasethe repo rate by 35 bps to 6.25% is a move thatwasanticipatedbythemarketand reflects that inflation has peaked out. This gives hope especially for the infrastructureindustry.Withimproved confidence and industry sentiments, there is a sense of optimism towards business outlook and demand growth. The GDP growth rate and the Indian Rupee has been resilient and shown stability,thustidingthroughtheglobal stormwithconfidenceandendurance. The commitment of RBI to constantly monitortheinflationdynamicswithout effectingthegrowthrateisreassuring fortheindustry.’’