The press conference of RBI Governor Shaktikanta Das has started. The Monetary Policy Committee of RBI has kept the repo rate unchanged at 6.5 percent this time. After increasing the repo rate for six consecutive times, RBI has kept it constant in the first MPC meeting of the new fiscal. It was believed that RBI could again increase the repo rate by 0.25 percent. However, the central bank has not done so. Giving information about the MPC meeting and speaking about the decisions taken during it, Governor Shaktikanta Das said these things.
GDP growth estimated at 6.5% in FY 24: RBI
In the MPC meeting held in February, the repo rate was increased by 0.25 per cent to 6.50 per cent. At that time, RBI had said that the key policy rate has been increased by 0.25 per cent to keep retail inflation under control and maintain high growth rate. The RBI governor said in his statement on Thursday morning that all the members of the MPC were in favor of not changing the repo rate. He said that the condition of the banking sector in India is very strong. There has been a 6% increase in food grains production in the country in FY 23. Inflation is expected to come down in FY 24 as per RBI. He said that the GDP growth in FY 24 could be 6.5%. He said the current account deficit stood at 2.7% of GDP in the October-December quarter of FY 23.
Retail inflation (CPI) may be 5.2 percent in FY 24: RBI Governor
Speaking on inflation, Governor Shaktikanta said that the retail inflation rate (CPI) in FY 24 could be 5.2 percent. He said that the target is to bring inflation within the prescribed limit in the medium term. He said that the fight will continue till the inflation does not come within the prescribed limit. The RBI Governor estimated that the GDP growth in the first quarter of FY 24 could be 7.8%. Das said the surveillance system in the country has been strengthened in recent years. RBI’s eye on Liquidity Management remains. The efforts of the Reserve Bank of India are also going on for the stability of the rupee. The RBI governor has advised companies to create capital buffers.
RBI has enough reasons to adopt a soft stance
Explain that SBI’s Chief Economic Advisor Soumya Kanti Ghosh had said that RBI now has enough reasons not to increase the repo rate in the April review. Despite the problems on the liquidity front, the central bank may take a soft stance in the upcoming MPC meeting.
Inflation may remain close to 5.5%
Ghosh said that on the front of retail inflation, a big relief is expected for the time being. The average inflation rate in the last 10 years has been 5.8 per cent. There is little chance that retail inflation will come down to 5.5 per cent or below in the coming days. For the past two months, retail inflation has been above the RBI’s comfortable range of 6 per cent. Retail inflation was 6.44 per cent in February and 6.52 per cent in January.
Bank of Baroda Chief Economist Madan Sabnavis says that after retail inflation remained above 6 per cent for the last two months and liquidity has also become neutral, it is estimated that RBI may increase the repo rate by 0.25 per cent. Also, it may signal that the rate hike phase is over. The repo rate has increased by 2.50% since May 2022.
