Key Takeaways of RBI Monetary Policy Announcements

On June 8, the six-member Monetary Policy Committee, led by RBI Governor Shaktikanta Das, unanimously raised the repo rate, the key policy rate at which the central bank lends short-term cash to banks, by 50 basis points to 4.90%. The latest policy rate hike follows the Reserve Bank's announcement in May of a 40 basis point increase in the repo rate in off-cycle policy action.

Here are the key takeaways of the announcements of the MPC Policy

• The Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) rates are raised by 50bps. The SDF rate is now 4.65%, and the MSF rate is now 5.15%.
• Monetary Policy Committee voted unanimously to remain focused on the withdrawal of accommodation to ensure inflation remains within target going forward.
• As on June 3, 2022, India's foreign exchange reserves (FER) stood at USD 601.1 billion.
• GDP growth forecast for FY23 retained at 7.2%. GDP growth is forecast at 16.2% for April-June. GDP growth is forecast at 6.2% for July-September. GDP growth is forecast at 4.1% for October-December. GDP growth is forecast at 4.0% for January-March 2023.
• CPI inflation forecast for FY23 raised to 6.7% from 5.7%. RBI Inflation forecast assumes normal monsoon and crude basket price at USD 105/barrel.
• The RBI will provide adequate liquidity in the banking system while normalising pandemic-related actions.
• The RBI keeps a close eye on the government securities market. As and when necessary, we will take the necessary steps.
• Individual house loan limits set by urban and rural cooperative banks are being raised upwards by more than 100% to reflect the increase in housing values over the last decade.
• To make transactions like subscriptions easier, the cap on recurring e-payments has been raised to Rs 15,000 from Rs 5,000.