 "RBI monetary policy: 5 key announcements from the governor's speech today")
The Reserve Bank of India's Monetary Policy Committee (RBI MPC), on Friday, kept the repo rate unchanged for the fifth time in a row at 6.5 per cent. While making the announcement, RBI Governor Shaktikanta Das said that the decision was unanimous considering the country's current economic situation.
Governor Das said that the inflation target of 4 per cent is yet to be achieved, "We have to stay the course." The MPC was originally formed to keep India's inflation at 4 per cent.
RBI MPC: 5 key announcements to remember
GDP growth projection
RBI Governor Shaktikanta Das announced that the MPC has hiked the gross domestic product (GDP) projection for 2023-24 (FY24) to 7 per cent from 6.5 per cent earlier. Das said that the domestic economic activities are holding up well.
Inflation projection
The inflation projection for FY24 has been kept unchanged at 5.4 per cent. Das said that although there has been broad-based easing in core inflation, risks to food inflation remain. He added that food inflation may lead to an uptick in inflation figures in November and December.
UPI payment limits
RBI raised the United Payments Interface (UPI) payment limits for hospitals and educational institutions to Rs 5 lakh from Rs 1 lakh per transaction.
Das also said that the RBI will lay down guidelines for web aggregators of loan products to bring more transparency to digital lending.
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Commercial sector growth
The RBI said the buoyancy in public sector capex, above-average capacity utilisation in manufacturing and domestic demand will help boost growth. The total flow of resources to the commercial sector stood at Rs 17.6 trillion during the current financial year, significantly higher than Rs 14.5 trillion last year.
Public sector capex
Despite weakness in external demand, exports were positive in October. Private consumption should gain from rural demand, manufacturing and buoyancy in services. The healthy balance sheet of corporate, business optimism and government infrastructure spending will boost public sector capex, Das added.