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RBI MPC Meeting Highlights & Update

by Financegossips

The Reserve Bank of India (RBI) is conducting its monetary policy review from August 8th to 10th, with the decision announcement on August 10th at 10 am. 

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The 6-member Monetary Policy Committee (MPC) is led by RBI Governor Shaktikanta Das. 

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The prevailing expectation is that the RBI will maintain its current benchmark rates, especially the repo rate which has remained at 6.5% for the past year. 

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Inflation concerns are driving a cautious and hawkish stance, with rising food prices, particularly in vegetables, contributing to a CPI inflation rate of 4.81% in June.

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The upcoming monsoon's unpredictable impact is expected to further impact the Consumer Price Index (CPI) in the future. 

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Despite a projected GDP growth close to 8% in the first quarter, the consensus is that no immediate stimulus for growth is necessary, keeping the repo rate unchanged. 

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The RBI's monetary policy committee voted 5:1 in favor of withdrawing accommodation to align inflation with targets and support growth. Professor Jayanth Varma dissented. 

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Deputy Governor T Rabi Shankar outlined the objective of achieving one billion customers for the central bank's digital currency by the end of June. 

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Strong fundamentals in the housing sector are expected to sustain upward momentum in real estate sales, emphasizing affordability, reliability, and quality of living. 

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The government aims to stimulate demand and incentivize real estate acquisition as a key driver of economic growth, framing policy actions accordingly. 

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Overall, RBI MPC remains cautious due to inflation, aiming for stability, exploring digital currency, and boosting real estate for growth.

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