RBI Monetary Policy Updates
The Monetary Policy Committee of RBI meets four times a year. The committee recently held its meeting on February 8, 2023. This is the first meeting since Finance Minister Nirmala Sitaraman presented her budget. The committee has four members. During the meeting, the members decide on various aspects such as repo rate, interest rate, reverse repo rate, Liquidity Adjustment Facility, Marginal Standing Facility, Bank Rate, Cash Reserve Ratio, Statutory Liquidity Ratio, etc.
Key decisions were taken during the meet
- The repo rate increased by 25 bps, that is, to 6.5%. In the last MPC Meet held in December 2022, RBI increased the repo rate by 35 bps. Since May 2022, RBI has increased the repo rate by 250 bps. This is being done to control the increasing inflation in the country
- Bond market timings were restored to 9 AM to 5 PM
- Permits to lend and borrow Government Securities
- MSF increased by 25 bps, that is, to 6.75%
- SDF (Standing Deposit Facility) increased to 6.25%
Policy rates before the meet
- Standing Facility Deposit Facility Rate: 6%
- Marginal Standing Facility rate: 6.5%
- Statutory Liquidity Ratio: 18%
- Cash Reserve Ratio: 4.5%
- Reverse Repo Rate: 3.35%
- Bank Rate: 6.5%
- Repo rate: 6.25%
What is the RBI saying?
After holding the MPC meeting, the RBI made the following announcements:
- Inflation in the country is to stay above 4%
- GDP Forecast: In 2024, it is to reach 6.4%. In the first quarter, the GDP is to touch 7.8% In Q2 it is to reach 6.2%. In Q3, the GDP will reach 6% and in Q4, the GDP will reach 5.8%.
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Month: Current Affairs - February, 2023
Category: Economy & Banking Current Affairs