Reserve Bank of India (RBI) Governor Shaktikanta Das revealed the outcomes of the Monetary Policy Committee’s (MPC) decisions after their three-day deliberation. The central bank’s focus remains on maintaining a strong Indian economy with robust bank and corporate balance sheets, fiscal consolidation, manageable external balances, and substantial forex reserves acting as a buffer against external shocks.
Governor Das emphasized the stable fundamentals, coupled with consumer and business optimism, fostering conducive conditions for sustained economic growth. The RBI’s policy stance revolves around the “withdrawal of accommodation” to align inflation with the targeted 6% (+/-2), concurrently supporting economic expansion.
Key Decisions by the Monetary Policy Committee:
1. Repo Rate Unchanged: The benchmark interest rate (repo) remains steady at 6.5%.
2. UPI Transaction Limit Enhancement: Proposed increase in UPI transaction limit for payments to hospitals and educational institutions from ₹1 lakh to ₹5 lakh.
3. GDP Growth Projection: Revised upward projection for the current fiscal to 7%, up from 6.5%.
4. Quarterly GDP Growth Outlook: Anticipated growth rates pegged at 6.5% and 6% for December and March quarters, respectively.
5. Inflation Projection: Average retail inflation maintained at 5.4% for 2023-24, with uncertainty influenced by intermittent food price fluctuations.
6. Vegetable Price Impact:Warning about potential inflation spikes in November and December due to intermittent shocks in vegetable prices.
7. Forex Reserves:As of December 1, forex reserves stand at $604 billion, instilling confidence in meeting external financing requirements comfortably.
The RBI’s commitment to strengthening the economy and balancing inflationary concerns underscores its pivotal role in navigating the nation through economic uncertainties.
