Skip to content

RBI MPC Meeting October 2023: Status quo on rates to policy stance – key takeaways from RBI governor statement

RBI MPC Meeting Highlights

RBI MPC committee maintained policy rate unchanged at 6.5%. The standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

Key take away from October MPC meeting:

  • The Governor said, they have identifies inflation as major risk to macro economics stability and committee remains focused to aligning inflation to 4% target. Emphatically reiterated that CPI aim is 4%, not 2%-6%; signalling that interest rate can remain higher for longer.
  • The committee sees headline inflation to further easing in September but overall inflation outlook clouded by uncertainties from kharif sowing.
  • India poised to become new growth engine of the world
  • Domestic growth exhibits resilience due to strong demand, services sector remains buoyant, Construction activity continues to be strong, private sector capex gaining ground and investment activity maintained momentum due to govt capex.
  • Capex in manufacturing continued to trend up, augurs well for investment activity.
  • The near-term inflation outlook is expected to improve with future trajectory to be conditioned by factors like lower area sown under pulses, dip in reservoir levels, El Niño conditions and volatile global energy and food prices.
  • CPI inflation is projected at 5.4 per cent for 2023-24, with Q2 at 6.4 per cent, Q3 at 5.6 per cent and Q4 at 5.2 per cent, with risks evenly balanced. CPI inflation for Q1:2024-25 is projected at 5.2 per cent.
  • Real GDP growth for 2023-24 is projected at 6.5 per cent, with Q2 at 6.5 per cent, Q3 at 6.0 per cent, and Q4 at 5.7 per cent, with risks evenly balanced. Real GDP growth for Q1:2024-25 is projected at 6.6 per cent
  • It has been decided to increase the existing limit for Gold Loans under the Bullet Repayment scheme from Rs. 2 lakh to Rs. 4 lakh in respect of Urban Co-operative Banks (UCBs) who have met the overall target and sub-targets under the Priority Sector Lending (PSL) as on March 31, 2023.
  • Incremental cash reserve ratio (I-CRR) of 10 per cent which side-lined about Rs. 1.1 lakh crore from the banking system is being discontinued in a phased manner, ending October 7, 2023. The release of the remaining impounded I-CRR funds tomorrow along with pick-up in government spending are expected to ease liquidity conditions.
  • Capacity utilisation in manufacturing sector continues to trend up.

No comment yet, add your voice below!


Add a Comment

Your email address will not be published. Required fields are marked *

blogs

    20

    Per order + Get Instant Pledge Benefits* + Zero delivery Brokerage

    10

    Per order only (No hidden charges)

    Open FREE Demat Account in less than 10 minutes (Commodity & Currency)

    20

    Per order + Get Instant Pledge Benefits* + Zero delivery Brokerage

    10

    Per order only (No hidden charges)

    Open FREE Demat Account in less than 10 minutes

    20

    Per order + Get Instant Pledge Benefits* + Zero delivery Brokerage

    10

    Per order only (No hidden charges)

    Related Posts

    Ambuja-Cements-to-acquire-Tuticorin-grinding-unit-for-Rs-414-crore
    India’s most trusted cement brand and a leading cement manufacturer and supplier, Ambuja Cements Ltd.,...
    Zomato shares turn multibagger in 1 year
    Zomato shares have given more than 50% return on Year to date basis and over...
    Maruti crossed 2 million units benchmark:highest ever domestic sales and export
    As per the regulatory filing of April 3, Maruti Suzuki's board of directors are set...