Apr 3, 2023 | 2023(February), Blog
February 8th, 2023
As highly anticipated, The Reserve Bank of India announced repo rate increase by 25 basis points to 6.5 %. MPC decision was passed by a majority of 4 members out of 6 members. This was the first Monetary Policy Statement of the year. There was no change in the reverse repo rate of 3.35%. The standing deposit facility rate stands revised to 6.25% and the marginal standing facility rate and the bank rate to 6.75%. The MPC also decided by a majority of 4 out of 6 to remain focused on the withdrawal of accommodation to ensure that inflation remains within target going forward while supporting
India’s central bank today cut its inflation forecast for the country for this fiscal year, even as the governor flagged stickiness of the core inflation to be a matter of concern. Inflation in the next fiscal year is expected to be 5.3 % for 2023-2024, with Q1 at 5 %, Q2 at 5.4 %, Q3 at 5.4 % and Q4 at 5.6 %.
The real GDP growth for 2023-24 is projected at 6.4% with Q1 at 7.8%, Q2 at 6.2%, Q3 at 6% & Q4 at 5.8%. The MPC in its December 2022 meeting had forecasted real GDP growth for 2022-23 at 6.8%, with Q3 at 4.4% and Q4 at 4.2 %. Real GDP growth for Q1FY24 was projected at 7.1 % and at 5.9 % for Q2.
Immediate Market Reaction
The Indian 10- year government bond closed at 7.344% rising 0.48%.