RBI keeps repo rate unchanged, lowers inflation forecast to 5.1%
New Delhi, June 8
The RBI on Thursday kept the repo rate unchanged at 6.50% for the second consecutive time. The Monetary Policy Committee (MPC) also decided to remain focused on ‘withdrawal of accommodation’ to ensure that inflation progressively aligns with the target while supporting growth, said RBI Governor Shaktikanta Das at a press conference in Mumbai.
Other key decisions
- Banks allowed to issue RuPay prepaid forex cards to expand reach globally
- Targets one million customers for Central Bank Digital Currency by the end of June
- Permits non-bank prepaid payment instruments (PPI) to issue e-RUPI vouchers
- Next meeting of the central bank’s Monetary Policy Committee scheduled for August 8 to 10
“These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth,” he said, adding that there was need to maintain Arjuna’s eye as headline inflation still remains above the target of 4%.
The headline inflation is expected to remain above 4% for the rest of the year. The RBI’s retail inflation projection for FY24 is lower at 5.1% as against its earlier projection of 5.2%.
GDP growth in the first quarter of FY24 is expected at 8%, followed by 6.5% in Q2, 6% in Q3, and 5.7% in Q4. For the full fiscal, the RBI retained the GDP growth projection at 6.5%, marking the country’s descent into sub-7% growth after clocking 7.2% in FY23.
The RBI also decided to allow banks to issue RuPay prepaid forex cards as they are gaining increased acceptance abroad. “This will expand the payment options for Indians travelling abroad,” he said.
Advising against rush in the last days of September to get Rs 2,000 notes exchanged, Das said about Rs 1.80 lakh crore of the banknotes have come back. This is about 50% of the Rs 2,000 notes in circulation before the announcement of withdrawal was made.
