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  • Repo Rate Unchanged for 6 th Time: February 2024 MPC Meeting Highlights

Repo Rate Unchanged for 6 th Time: February 2024 MPC Meeting Highlights

  • 8 Feb 2024
  • 3 mins read
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Shaktikanta Das, the Governor of RBI, chaired the Monetary Policy Committee (MPC) meeting and revealed that the repo rate will remain unchanged at 6.50% on 8th February 2024. This comes as no surprise since retail inflation continues to be above its target of 4%. 

This is the sixth consecutive time that the repo rate has remained unchanged. The RBI last changed the rate in February 2023, increasing from 6.25% to 6.50% to curb inflation. Das also stated that the focus will be the withdrawal of accommodation to ensure that inflation aligns with goals and supports GDP growth.

The committee also revealed the retail inflation projection for 2023-2024 to be at 5.4% with 5% in Q4. Inflation is further projected to be at 4.5% for FY25. The projections for the coming financial year are:

  • 5.0% for Q1 
  • 4.0% for Q2 
  • 4.6% for Q3 
  • 4.7% for Q4

Considering the risks from geopolitical tensions, geoeconomic fragmentation and volatility in international financial markets, the committee stated the projection for real GDP growth to be at 7%, with quarter projections as follows: 

  • 7.2% for Q1 
  • 6.8% for Q2 
  • 7.0% for Q3 
  • 6.9% for Q4 

The RBI Governor also stated that the Indian rupee remained stable despite a stronger USD and elevated US Treasury yields. This reflects the stability and strength of the country’s economy, he added.

Das also revealed that the framework for the electronic platforms, which was issued in 2018 due to development in technology and market products, will be revised. He also stated that residents will now be allowed to hedge gold prices in the OTC market in IFSC, which will give them more flexibility. 

In line with its focus on customer-centricity, the committee announced that it may issue rules wherein banks will have to offer all-inclusive rates. The rates will reflect the interest and other associated costs, such as processing fees, documentation fees and more. This will help borrowers have a clear understanding of the actual rate they may have to pay. 

The RBI governor also stated that all regulated entities will now have to provide a Key Fact Statement (KFS) to borrowers in case of all retail and MSME loans. Currently, a KFS is only mandated for microfinance loans, digital lending by regulated entities, and loans from scheduled commercial banks to individual borrowers. The move to mandate all regulated entities to issue a KFS will help foster better disclosure and transparency.

Das also stated that a principle-based framework for the authentication of digital payment transactions would be issued separately. This is to facilitate the use of alternate authentication mechanisms for the security of digital payments. The committee also proposed to enable additional use cases for transactions via Digital Rupee wallets using programmability and offline functionality. The introduction of these functionalities will happen gradually through the pilot banks.

The committee also noted that the domestic economic activity is holding up well and is expected to be backed by the momentum in rising consumer confidence, investment demand and optimistic business sentiments. Das also said, “What we have attempted to do today is to clearly state that the stance of policy should not be read as excessive liquidity is prevailing.” He also added that the liquidity is actively managed through proactive monitoring and prompt action, when needed, on the institutional, sectoral and systemic signs of risk.

In terms of when the stance will change to neutral, Das said, “I cannot give any forward guidance on what are the pre-conditions for the stance of policy to be changed to neutral. There are a lot of uncertainties. In such an environment, we can’t give any forward guidance.” The next MPC meeting is scheduled from 3rd to 5th April 2024.



  • 8 Feb 2024
  • 3 mins read
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