Monetary Policy Statement, 2023-24 Resolution of the Monetary Policy Committee (MPC) October 4 to 6, 2023

Summary:

The Monetary Policy Committee (MPC) of the Reserve Bank of India has decided to keep the policy repo rate unchanged at 6.50% to ensure that inflation progressively aligns with the target while supporting economic growth. The decision is based on an assessment of the current and evolving macroeconomic situation, which suggests that global growth is losing momentum, inflation is easing gradually, and domestic demand conditions are expected to benefit from sustained buoyancy in services, revival in rural demand, and government thrust on capex.

The MPC has projected a CPI inflation of 5.4% for 2023-24, with risks evenly balanced, and real GDP growth of 6.5% for the same period. The committee has also observed that unexpected food price shocks are impacting the inflation trajectory and has decided to remain on high alert, with a focus on withdrawal of accommodation to ensure that inflation aligns with the target while supporting growth.