The six-member Monetary Policy Committee (MPC) headed by RBI Governor on Wednesday (April 6, 2023) decided to keep the policy repo rate unchanged at 6.50%. Reserve Bank projected India’s GDP growth forecast raised to 6.5% from the previous 6.4 percent for 2023-24. The present policy rates can still be regarded as accommodative, the statement said. “Our job is not yet finished and war against inflation has to continue until we see a durable decline in inflation closer to the target,” said Governor Shaktikanta Das in his statement.
The current reserve ratios and policy rates which remain unchanged are as under.
|CRR (Cash Reserve Ratio)||4.50%|
|SLR (Statutory Liquidity Ratio)||18.00 %|
|Standing Deposit facility (SDF)||6.00%|
|Reverse Repo Rate*||3.35%|
|MSF Rate (Marginal Standing Facility Rate)||6.50%|
*SDF is the new floor for policy rates introduced by RBI. The SDF rate is applied for which banks park their excess funds with the RBI without any collateral. Although, the earlier system of reverse repo rate will remain as part of RBI’s toolkit and its operation will be at the discretion of the RBI for purposes specified from time to time, according to RBI’s announcement. This move of RBI makes the reverse repo rate redundant for now.