GDP, CPI and Shaktikanta Das' stance: Key takeaways from RBI MPC meeting

RBI MPC policy meeting: A surprise was least expected from Reserve Bank of India (RBI) governor Shaktikanta Das regarding the Indian economy's numbers, which were to be announced on Thursday (August 10) morning.

He threw no surprise on Thursday when he maintained the repo rate at 6.50 per cent, the fourth consecutive monetary policy meeting, when it remained unchanged.

The only significant change in the numbers were the Consumer Price Index (CPI) rate was revised from 5.1 per cent to 5.4 for the financial year 2023-24. 

Not just the repo rate, GDP growth forecast for all quarters also remained unchanged at 6.50 per cent. 

After the meeting, Das said that India’s strong macroeconomic fundamentals have led to strong growth, and the country is contributing approximately 15 per cent to global growth.

He said that the central bank is keen to take swift action if required, but he also predicted global growth to remain slow in the next few years.

"The RBI is prepared to act if warranted; and global growth will remain low by historical standards for the next few years."

ZeeBiz takes you through some of the key takeaways of the MPC meeting.

RBI MPC policy meeting: Repo rate

The repo rate was kept unchanged at 6.50 per cent. The last time the RBI made a change was in December 2022. 

RBI MPC policy meeting: CPI Rate and Estimates

The RBI has revised its inflation forecast for Q2 and Q3 higher because of the sharp increase in food prices.

The CPI for FY24 has been revised to 5.4 per cent from 5.1 per cent .

CPI estimates for different quarters are-Q1FY24 (5.4 per cent), Q2FY24 (6.2 per cent) , Q3FY24 (5.7 per cent), Q4FY24 (5.2 per cent), Q1FY25 (5.2 per cent).

RBI MPC policy meeting: GDP forecast

The RBI hasn't changed its GDP forecast for all quarters.

They are; for Q1FY24 (8 per cent), for Q2FY24 (6.5 per cent), for Q3FY24 (6 per cent), for Q4FY24 (5.7 per cent), for Q1FY25 (6.6 per cent)    

RBI MPC policy meeting: ICRR

The central bank has imposed a 10 per cent Incremental CRR (ICRR) on deposits received by banks between May 19 and July 28.

Das said that the measure is temporary and aimed at mopping up excess liquidity after the return of Rs 2,000 currency notes.

RBI MPC policy meeting: Rupee value and Forex Reserve 

Das said that the rupee has remained strong since January this year and Forex Reserves have crossed the $600-billion barrier. 

RBI MPC policy meeting: Cash Reserve Ratio

Das has changed the cash reserve ratio from its earlier rate of 4.5 per cent.

RBI MPC policy meeting: UPI Lite Payment Limit

The RBI governor introduced offline payments in UPI by using near-field technology via UPI Lite. He also enhanced the transaction limit for small-value payments from Rs 200 to Rs 500 in offline mode.

RBI MPC policy meeting: SDF, MSF and Bank rate

The Deposit Facility rate will remain unchanged at 6.25 per cent, while the Standing Facility rate and the bank rate have also been kept unchanged at 6.75 per cent.

RBI MPC policy meeting: Withdrawal of accommodation

By a majority of 5:1, the RBI MPC decided to focus on the withdrawal of accommodation.