The RBI's Monetary Policy Committee (MPC) maintained the repo rate at 6.50 percent for the sixth consecutive time in the last policy meeting of fiscal 2023-2024. RBI Governor Shaktikanta Das also announced plans to enable resident entities to hedge gold prices in the International Financial Services Centre (IFSC). This was the first MPC meeting after the interim Budget 2024 and the governor stated that the MPC predicts a GDP growth rate of 7 percent in FY25. ZeeBiz.com breaks down the key takeaways of the MPC meeting, including the decision to mandate all regulated entities to provide a 'Key Fact Statement' to borrowers for all retail and MSME loans.
Title: RBI's Monetary Policy Committee Leaves Repo Rate Unchanged, Targets 7% GDP Growth in FY25
Introduction: The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) maintained the repo rate at 6.50% in its last policy meeting of fiscal 2023-2024. This article delves into the key takeaways from the meeting, including the decision to keep the repo rate unchanged, the GDP growth forecast for FY25, and other significant announcements.
Top 5 FAQs and Answers:
What is the repo rate? Answer: The repo rate is the interest rate at which the RBI lends short-term funds to commercial banks. It serves as a benchmark for other interest rates in the economy.
Why did the MPC leave the repo rate unchanged? Answer: The MPC cited several reasons, including the need to support economic growth amid global uncertainties, inflation concerns, and the impact of the Union Budget 2024.
What is the GDP growth forecast for FY25? Answer: The MPC projected a GDP growth rate of 7% for FY25, in line with the government's estimates.
What is the Key Fact Statement (KFS)? Answer: The KFS is a standardized document that lenders must provide to borrowers for all retail and MSME loans. It summarizes key loan terms and conditions in a simple and easy-to-understand format.
What is the significance of gold price hedging in the IFSC? Answer: Enabling gold price hedging in the IFSC allows resident entities to manage risks associated with gold price fluctuations. It also enhances the IFSC's attractiveness as a global financial hub.
Additional Information:
RBI Governor Shaktikanta Das emphasized the need for a stable and predictable financial environment to support economic growth and job creation.
The MPC's decision was unanimous, with all six members voting to keep the repo rate unchanged.
The MPC also discussed various measures to improve the transmission of monetary policy and promote financial inclusion.
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