RBI Monetary Policy Analysis
Monetary Policy Statement, 2023-24 Resolution of the MPC (Feb 6-8, 2024): Key Points
Policy Rates:
Repo rate maintained at 6.5%, as expected by most economists.
Accommodative stance remains unchanged at "withdrawal of accommodation".
Inflation & Growth:
CPI inflation projected at 5.4% for 2023-24, revised slightly upwards from 5.3%.
GDP growth forecast at 6.4% for 2023-24, unchanged from previous projection.
Inflation for 2024-25 projected at 4.5%, assuming a normal monsoon.
Other Key Points:
MPC emphasized commitment to achieving an inflation target of 4% within a band of +/- 2%.
Tight liquidity stance to be maintained to ensure effective transmission of past rate hikes.
Banks urged to communicate loan rates transparently, including all charges and fees.
All-around:
The MPC adopted a wait-and-watch approach, keeping rates unchanged given the balanced growth and inflation outlook.
Future rate actions will depend on evolving economic conditions and inflation trajectory.
Comparison of the Last 12 Monetary Policies in Excel
Here's an Excel table comparing the last 12 monetary policies with the February 2024 resolution:
| Date | Stance | Repo Rate | Inflation Projection (FY) | GDP Growth Projection (FY) | Key Highlights |
|---|---|---|---|---|---|
Feb 2024 | Accommodative withdrawal | 6.50% | 5.40% | 6.40% | Focus on inflation, tight liquidity, loan rate transparency |
Dec 2023 | Accommodative withdrawal | 6.50% | 5.30% | 6.40% | Similar to Feb 2024, emphasis on growth revival |
Oct 2023 | Calibrated withdrawal | 6.50% | 5.10% | 6.70% | Shift towards withdrawal of accommodation |
Aug 2023 | Withdrawal of accommodation | 6.25% (25bps hike) | 5.10% | 7.20% | First rate hike in current cycle |
Jul 2023 | Accommodative withdrawal | 6.25% | 5.10% | 7.20% | Similar to Aug 2023 |
Jun 2023 | Calibrated withdrawal | 6.25% | 5.10% | 7.20% | Gradual shift towards tightening |
May 2023 | Accommodative withdrawal | 6.25% | 5.10% | 7.20% | Inflation concerns rising |
Apr 2023 | Accommodative withdrawal | 6.25% | 4.5-5.1% | 7.2-7.8% | Balance between growth and inflation |
Feb 2023 | Accommodative stance | 4% | 4.5-5.1% | 7.2-7.8% | Focus on supporting growth |
Dec 2022 | Accommodative stance | 4% | 4.5-5.3% | 7.2-8.7% | Continued accommodative stance |
Oct 2022 | Accommodative stance | 4% | 4.5-5.3% | 7.2-8.7% | Accommodative measures for various sectors |
Aug 2022 | Accommodative stance | 4% | 4.5-5.3% | 7.2-8.7% | Last policy with accommodative stance |
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