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RBI Monetary Policy Updates
- RBI Monetary Policy Updates
- During the meeting, key decisions were made
- Policy rates before the meeting
- What has the RBI stated following the meeting?
- Frequently Asked Questions:
- What is RBI’s monetary policy?
- How many times RBI announces monetary policy in a year?
- What is the objective of monetary policy?
- How many members are there in RBI monetary policy?
RBI Monetary Policy Updates
The RBI’s Monetary Policy Committee meets four times a year. The most recent meeting of the committee is conducted today i.e. on February 8, 2023. This is the first meeting since Finance Minister Nirmala Sitaraman unveiled her budget. The committee consists of six people. The members of the group make decisions about a variety of topics at the meeting, including the repo rate, interest rate, reverse repo rate, liquidity adjustment facility, margin standing facility, bank rate, cash reserve ratio, statutory liquidity ratio, etc.
During the meeting, key decisions were made
- The repo rate is increased by 25 basis points, or 6.5%. The RBI raised the repo rate by 35 bps during the most recent MPC Meeting, which was held in December 2022. RBI has raised the repo rate by 250 basis points since May 2022. To control the nation’s rising inflation, this is being done.
- Timings for the bond market have been reset to 9 AM to 5 PM.
- permits for borrowing and lending government securities.
- MSF increased by 25 bps, or to 6.75 percent.
- Standing Deposit Facility (SDF) increased to 6.25%.
Policy rates before the meeting
- Cash Reserve Ratio: 4.5%
- Reverse Repo Rate: 3.35%
- Bank Rate: 6.5%
- Repo rate: 6.25%
- Standing Facility Deposit Facility Rate: 6%
- Marginal Standing Facility rate: 6.5%
- Statutory Liquidity Ratio: 18%
What has the RBI stated following the meeting?
The following announcements were made by the RBI following the MPC meeting:
- The country’s inflation is expected to remain above 4%.
- Forecasted GDP growth for 2024 is 6.4%. The GDP is expected to reach 7.8% in the first quarter. It is expected to reach 6.2% in Q2. The GDP will hit 6% in the third quarter and 5.8% in the fourth.
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Frequently Asked Questions:
What is RBI’s monetary policy?
The monetary policy is a policy formulated by the central bank, i.e., RBI (Reserve Bank of India) and relates to the monetary matters of the country. The policy involves measures taken to regulate the supply of money, availability, and cost of credit in the economy.
How many times RBI announces monetary policy in a year?
The Monetary Policy Committee is responsible for fixing the benchmark interest rate in India. The meetings of the Monetary Policy Committee are held at least four times a year (specifically, at least once a quarter) and it publishes its decisions after each such meeting.
What is the objective of monetary policy?
The primary objective of monetary policy is Price stability. The price stability goal is attained when the general price level in the domestic economy remains as low and stable as possible in order to foster sustainable economic growth.
How many members are there in RBI monetary policy?
Section 45ZB of the RBI Act provides for the constitution of a six-member Monetary Policy Committee (MPC) to determine the policy rate required to achieve the inflation target.
