As for the big decisions made by the Reserve Bank of India, let us tell you that the RBI once again increased the repo policy rate by 0.25 percent in the bi-monthly monetary policy review mainly with the aim of to control inflation. Is.
The Reserve Bank of India has increased its EMI by increasing the policy rate repo, but the good thing is that inflation has also indicated that it will come down soon. Apart from this, it is also proposed to provide a UPI service to the travelers who come to India for in-store payments. At the same time, India’s economic growth rate is expected to remain at a satisfactory level in the era of global recession and there is no chance of much volatility in the value of the rupee.
As for the big decisions made by the Reserve Bank of India, let us tell you that the RBI once again increased the repo policy rate by 0.25 percent in the bi-monthly monetary policy review mainly with the aim of to control inflation. It is. Because of this, the main policy rate has risen to 6.50 percent. Along with this, the central bank has raised the estimate of the growth rate of the Gross Domestic Product (GDP) for the current financial year 2022-23 from 6.8 percent to 7 percent. At the same time, it has been estimated that the GDP (Gross Domestic Product) growth rate will be 6.4 percent in the coming fiscal year. Along with this, RBI has estimated that retail inflation will be 6.5 percent in the current fiscal year and 5.3 percent in the next fiscal year.
How many times has the repo rate increased in the recent past?
Let us tell you that the repo rate is the interest rate at which commercial banks borrow from the central bank to meet their immediate needs. An increase in this means that borrowing from banks and financial institutions will become more expensive and the monthly fee (EMI) on the existing loan will increase. Giving information on the decision taken at the three-day meeting of the Monetary Policy Committee (MPC), which began on Monday, RBI Governor Shaktikanta Das said in a digitally broadcast statement: “Given the current economic situation , the MPC decided to reduce the policy rate repo rate “It has decided to increase it from 0.25 percent to 6.50 percent.” He said that out of six members of the Monetary Policy Committee, four voted in favor of raising the repo rate, however this rate of increase in the repo rate is less than the previous five increases and the market expected the same.
Let us tell you that RBI has increased the repo rate by 2.50 percent in total six times since May this year, mainly to control inflation. Previously, the repo rate was increased by 0.40 percent in May and 0.50 percent each in June, August and September and 0.35 percent in December. In fact, the central bank mainly takes into account retail inflation when deciding the policy rate.
What will be the country’s economic growth rate?
As far as the country’s economic growth is concerned, the RBI has projected that the economic growth rate will slow down to 6.4 percent in the upcoming fiscal year 2023-24 in view of the global crisis. Let us tell you that this RBI estimate is in line with the Economic Review estimate tabled in Parliament recently. In the 2022-23 Economic Study, the growth rate at constant prices in the next year has been estimated at 6.5 percent. Introducing the latest bi-monthly monetary review for the current fiscal year, Reserve Bank Governor Shaktikanta Das said the Indian economy remains combative amid the volatility of world events. Shaktikanta Das said: “The data available for the second and third quarters of the current fiscal year show that economic activity in the country remains strong.” He said that urban demand is increasing due to the increase in people’s discretionary spending. People’s spending, especially on services such as travel, tourism and hospitality, is on the rise. Shaktikanta Das said: “There are also signs of improvement in rural demand. This is shown by the sales figures for tractors and two-wheelers for the month of December: “The RBI Governor said that passenger car sales and the number of domestic air passengers have increased on an annual basis. Several other indicators also point to a rebound in activity.
He said investment activities are also increasing. Non-food credit has grown by 16.7% yoy till Jan 27, 2023. The total flow of resources for the commercial sector has risen to Rs 20.8 lakh crore in 2022-23 till now, from Rs 12.5 lakh crore a year ago. The RBI governor said that taking all these things into account, we estimate that the economic growth rate at constant prices in 2023-24 will be 6.4 percent. The GDP growth rate will be 7.8 percent in the first quarter, 6.2 percent in the second quarter, 6 percent in the third quarter, and 5.8 percent in the fourth quarter.
inflation will be lower
On the other hand, when it comes to inflation, let us tell you that the Reserve Bank of India has projected retail inflation to come down to 5.3 percent in the upcoming fiscal year 2023-24. Apart from this, retail inflation is expected to remain at the level of 6.5 percent in the current fiscal year. Reserve Bank Governor Shaktikanta Das said: “Going forward, inflation will come down in 2023-24. However, it will remain above 4 percent,” he said, adding that the inflation outlook remains uncertain due to geopolitical tensions, volatility in the global financial market, rising non-oil commodity prices and crude oil prices. by fluctuations.
If we look at the main points of the Reserve Bank of India’s Monetary Policy Review, they are as follows:
The key policy rate repo was increased by 0.25 percent to 6.50 percent.
Four of the six members of the Monetary Policy Committee voted in favor of increasing the repo rate.
In the current fiscal year, the growth rate is estimated at seven percent. The growth rate will slow to 6.4 percent in 2023-24.
The Monetary Policy Committee was in favor of focusing on the withdrawal of the accommodative stance.
Retail inflation is estimated at 5.6 percent in the fourth quarter.
Retail inflation will remain at 6.5 percent this year. It is expected to drop to 5.3 percent in the next fiscal year.
The rupee has shown less volatility than other Asian currencies in the past year and this year so far.
The current account deficit will narrow in the second half of 2022-23.
It is also proposed to provide a UPI service to travelers who come to India for in-store payments. Initially, this facility will be available to passengers from G20 countries.