The Reserve Bank of India (RBI) Monetary Policy Committee (MPC) meeting chaired by Shaktikanta Das on October 4-6, 2023, decided to keep the repo rate unchanged at 6.5%. This is the third time in a row that the MPC has kept rates unchanged.
what is the rbi meeting october 2023
The policy meeting chaired by RBI’s Shaktikanta Das was the Monetary Policy Committee (MPC) meeting that took place from October 4 to October 6, 2023. The MPC is a six-member committee that decides the key policy rates such as the repo rate, the reverse repo rate, the marginal standing facility rate, and the bank rate. The MPC is headed by the RBI governor and includes four external members appointed by the government and one deputy governor of the RBI.
The main objective of the MPC is to maintain price stability while keeping in mind the objective of growth. MPC is mandated to ensure that the Consumer Price Index (CPI) inflation is at 4% with a margin of 2% on either side. The MPC meets at least four times a year and publishes its decisions after each meeting.
The outcome of the latest MPC meeting was announced by Shaktikanta Das on
October 6, 2023 at 10 AM. He will also address a press conference at 12 noon that day, where the MPC has decided to revise the policy repo rate to 6.5% and maintain an accommodative stance as long as necessary to mitigate the impact of Covid-19 on the economy and restore and sustain growth on a sustained basis, while ensuring that inflation remains contained. Decided to continue. within target range.
MPC also decided to retain the GDP growth projection for 2023-24 at 9.5%, with risks broadly balanced. The MPC noted that the economic activity has broadly evolved in line with its expectations in the August policy, with signs of revival in various sectors. The MPC also observed that the inflation outlook remains uncertain due to supply-side pressures, global commodity prices, and demand conditions.
The MPC reiterated its commitment to use all policy tools available to support the recovery process and preserve financial stability. The MPC also urged the government to continue with its fiscal measures to boost demand and investment in the economy.
The MPC also decided to remain focused on withdrawal of accommodation. This means that the RBI will gradually reduce the amount of liquidity in the system in order to bring inflation under control. The MPC’s decision to keep rates unchanged was largely in line with expectations. However, some analysts had expected the MPC to start raising rates again in order to bring inflation under control.
RBI’s policy meeting is closely watched by businesses and consumers alike, as it has a direct impact on interest rates and the cost of borrowing.The MPC’s decision to keep rates unchanged is likely to be welcomed by businesses, as it will help to keep borrowing costs low. However, it may be seen as a disappointment by some consumers, who are hoping for lower interest rates on loans and deposits.
Next MPC meeting is scheduled to be held from December 5 to December 7, 2023.