New Delhi: The Reserve Bank of India (RBI), the central bank of the country, has announced the monetary policy decisions for the last month of the year 2023. The RBI Governor Shaktikanta Das has given a big New Year gift to the common people by keeping the interest rates unchanged for the fifth consecutive time. This means that the monthly installments (EMIs) on various loans, including home and car loans, will not increase in the coming days.
The RBI’s Monetary Policy Committee (MPC), which met for three days from Wednesday to Friday, has unanimously decided to maintain the policy repo rate at 6.5 percent. The repo rate is the rate at which the RBI lends money to commercial banks. The MPC has also decided to continue with its accommodative stance, which means that it is willing to lower the interest rates if needed to support economic growth.
The MPC has also kept the reverse repo rate, the rate at which the RBI borrows money from commercial banks, at 6.25 percent. The marginal standing facility (MSF) rate and the bank rate, which are the rates at which the RBI provides emergency liquidity to banks, have been kept at 6.75 percent.
The MPC has taken these decisions after considering the current and projected macroeconomic conditions, the global challenges, and the inflation outlook. The RBI Governor said that the country’s economy remains resilient and the fundamentals are strong, despite the uncertainties caused by the COVID-19 pandemic and its variants. He cited the strong performance of indicators such as GST collections, PMI, and industrial production as evidence of the economic recovery.
The RBI has also revised its growth and inflation projections for the current financial year 2023-24. The RBI now expects the GDP growth rate to be seven percent, up from the earlier estimate of 6.5 percent. The retail inflation rate, which is measured by the Consumer Price Index (CPI), has been maintained at 5.4 percent, within the RBI’s target range of four percent plus or minus two percent. The RBI Governor said that the inflation outlook remains uncertain due to the supply-side pressures, the volatility in global commodity prices, and the fiscal and monetary stimulus measures. He said that the RBI will continue to monitor the inflation situation closely and take appropriate actions to maintain price stability and support growth.
