RBI policy announcement: War on inflation continues, no relief on interest rates!
The Reserve Bank of India (RBI) has kept the repo rate stable at 6.5% in its new monetary policy. Governor Shaktikanta Das announced to continue the fight against inflation. However, the economy has been shocked by the rising inflation estimates and falling GDP growth. RBI reduced the GDP growth estimate for the current financial year from 7% to 6.6%. The new inflation estimate further disappointed the general public.
INDC Network : Business : RBI's Monetary Policy: New Signals on Inflation and GDP
Repo rate decision
RBI has frozen the repo rate at 6.5% for the 11th time in a row. The last time interest rates changed was in February 2023, when there was an increase of 0.25%.
Increase in inflation estimates
RBI Raises Inflation Estimates:
- Third quarter : increased from 4.8% to 5.7%.
- Fourth quarter : increased from 4.2% to 4.5%.
- Next financial year : Expected to remain stable at 4%.
Decline in growth estimates
The GDP growth estimate for the current financial year has been reduced from 7% to 6.6%.
- Third quarter : down from 7.4% to 6.8%.
- Fourth quarter : down from 7.4% to 7.2%.
Governor's last meeting
This was the last meeting of RBI Governor Shaktikanta Das. A new governor may be appointed in the February 2024 meeting.
Data table
| Policy aspect | first guess | New estimate |
|---|---|---|
| Repo rate | 6.5% | 6.5% (stable) |
| Third Quarter Inflation Rate | 4.8% | 5.7% |
| Fourth Quarter Inflation Rate | 4.2% | 4.5% |
| Current fiscal year GDP | 7% | 6.6% |
| Third quarter GDP growth | 7.4% | 6.8% |
| Fourth quarter GDP growth | 7.4% | 7.2% |
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