Recently the RBI monetary policy committee (MPC) announced a very crucial update about the upcoming FY24 GDP growth. After a bench headed by the governor Shaktikanta Das in the second monthly monetary policy meeting it decided that, the repo rate would be unchanged at 6.5%. The members of the meeting decided to vote for a 5:1 ratio where 5 focused on the retention of the present repo rate while 1 contradicted the proposal.
Also the GDP growth forecast for FY 24 is retained at 6.5% by the RBI governor. While the growth projection remains at 6.5%, the inflation rate projection abated from previously 5.2% to 5.1%. It is also assumed that the liquidity surplus will vary more and may increase due to the withdrawal of rupees 2000 denomination notes. Despite that RBI has stated that they will manage the liquidity in a calibrated manner.
Experts look at the policy as the authority is bringing the retail inflation closer to the target of 4% and that is prudent for the RBI has followed a wait and watch strategy and its global volatile economics situation where risk is lingering to domestic inflation. Thus, this will hopefully provide more damage control in future.