RBI MPC Live Updates.Governor's Announcement and Key Highlights [june2023]

 RBI MPC Live Updates June 2023

The Monetary Policy Committee (MPC) made the following decisions:

Reserve Bank keeps repo rate unchanged at 6.5%

The Monetary Policy Committee (MPC) has unanimously decided to keep the policy repo rate unchanged at 6.50 per cent.

Governor Shaktikanta Das addresses the press conference 

"The rate action is obviously a pause. Future action will depend on the evolving situation. There is no room for complacency. The MPC is resolutely focused on the 4 percent CPI inflation target."

RBI Deputy Governor T Rabi Sankar: "No specific date for the launch of CBDC to the public at large. But we hope to have 1 million customers by June end. We are working right now on making the CBDC QR codes interoperable with UPI.

RBI Governor Shaktikanta Das: So far, about Rs 1.8 lakh crore worth of Rs 2,000 notes have come back to the banking system. This is about half the notes in value terms that were in circulation as on March 31, 2023."

RBI Governor Shaktikanta Das: So far, about Rs 1.8 lakh crore worth of Rs 2,000 notes have come back to the banking system. This is about half the notes in value terms that were in circulation as on March 31, 2023.

RBI Governor Shaktikanta Das: It is a pause in this meeting. I have not said anything about pivoting. Everything I said about a pivot in April, I would like to reiterate that.

RBI Governor Shaktikanta Das: Our inflation target is 4 percent. So our effort will be to align our actions to reach that target. To say anything more than that given the uncertainties is not desirable.

RBI Governor Shaktikanta Das: We have no thinking to issue norms about financial influencers. SEBI is dealing with that.

RBI Deputy Governor Michael Patra: Caution among banks to park funds at our variable rate reverse repos is due to the upcoming advance tax outflows.

RBI Deputy Governor M Rajeshwar Rao: It is not correct to infer that the level of write-offs have triggered our decision to issue a comprehensive regulatory framework governing compromise settlements and technical write-offs.

RBI Deputy Governor Michael Patra: The MSP hikes are about 7-8 percent. So this will have an impact of 10-12 basis points over and above our inflation projections

RBI MPC final thoughts

The MPC’s decision turned out to be along expected lines, as was the minor cut in the CPI inflation forecast for 2023-24 to 5.1 percent. Meanwhile, the RBI retained its GDP growth forecast for the current year at 6.5 percent. If there is a key takeaway from today’s proceedings, it is Governor Shaktikanta Das repeatedly stressing that the MPC is focused on aligning inflation to its 4 percent target on a durable, and not one-off, basis. Clearly, there is some way to go for the RBI to win its fight against inflation.

Thanks

Jaydhunna