RBI Gov. Shaktikanta Das said that India’s Monetary Policy Committee opted to maintain the benchmark repo rate for a second consecutive meeting, BQ Prime reported on June 8.
“Going forward, the RBI will remain nimble in its liquidity management while ensuring that adequate resources are available for the productive requirements of the economy,” Das said, according to BQ Prime.
He insisted that should the need arise, the committee would be prepared to take action, BQ Prime reported. Following the examination, the MPC made the following unanimous decision: To maintain the repo rate at 6.5%. The standing deposit facility rate is 6.25%, which is 25 basis points less than the repo rate.
In its upcoming sessions, the MPC won’t hesitate to take any more action that may be necessary, Das said. Prior to choosing to take a break in April and June, the committee had increased the benchmark repo rate by 250 basis points in the previous cycle, BQ Prime reported. With a 5:1 majority, the position on withdrawing accommodations remained unaltered. Concerning this section of the resolution, Jayanth R. Varma voiced his opposition.
The direction of headline inflation in the future is probably going to be influenced by changes in food prices, according to BQ Prime’s report. The India Meteorological Department’s prediction of a typical southwest monsoon bodes well for Kharif crops, but it would be necessary to closely observe the monsoon's spatial and temporal distribution in order to gauge the possibilities for agricultural production.
Das said the economy is still robust, with real GDP growth in Q4FY23 coming in stronger than anticipated thanks to increased net exports and fixed investments, BQ Prime reported. Private spending and general economic activity should be supported in the present year by the increased rabi crop production in 2022–2023, the anticipated typical monsoon and the ongoing buoyancy in services.
