The RBI governor will announce the repo rate today. What happened at the last MPC meeting? | Top Vip News

Reserve Bank of India Governor Shaktikanta Das will announce the bi-monthly policy on Thursday, and experts anticipate a status quo in the key interest rate as inflation hovers around the upper tolerance level of 6 per cent.

Over the past year, the Reserve Bank has kept the repo rate at 6.5 per cent, having last increased it in February 2023 from 6.25 per cent to 6.5 per cent to curb inflation driven mainly by global factors.

While retail inflation in the current financial year has seen a decline from its peak of 7.44 per cent in July 2023, it remains elevated at 5.69 per cent in December 2023, albeit within the comfort zone of the Reserve Bank from 4 to 6 percent.

The Monetary Policy Committee (MPC), headed by Governor Das, began its three-day deliberations on Tuesday.

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What happened at the last MPC meeting? Main points

• In the last MPC meeting on December 8, the RBI kept key rates unchanged for the fifth consecutive time.

• The Monetary Policy Committee, comprising three RBI members and three external members, voted unanimously in favor of maintaining the benchmark repo rate at 6.5 per cent.

• MPC anticipated faster growth in the world’s fastest-growing major economy, considering an uncertain inflation outlook ahead of the election.

• All but one panel member voted to maintain the “de-accommodation” policy stance, suggesting rates may remain higher for an extended period.

• The central bank raised its economic growth forecast to 7 percent from 6.5 percent.

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• Encouraging signs such as expanding manufacturing PMI and strong growth in eight major industries reinforce confidence in sustained and robust economic growth, Governor Das said.

• Inflation prospects depend on food price uncertainty, with high global sugar prices being a concern, Shaktikanta Das said.

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• Governor Das added that “excessive tightening” may pose growth risks to the economy, clarifying that it does not indicate a shift towards a neutral policy stance.

• Additional measures included allowing banks and money market participants to make balance adjustments to the MSF and SDF on holidays and weekends, with the aim of normalizing liquidity swings and avoiding excessive volatility in lending rates. short term.