The process of increase in interest rates that started from May 2022 has now stopped. The Reserve Bank has not made any change in the interest rates this time. In the meeting of the Monetary Policy Committee, all 6 members voted in favor of not making any change in the interest rates.
On keeping the repo rate unchanged at 6.50%, Reserve Bank Governor Shaktikanta Das said that this pause in interest rates is only for this time, but the decision will be taken according to the circumstances that will arise in the future.
It means that the process of increase in interest rates has stopped completely, at present there is no such scene, this pause is limited to this policy only, action will be taken according to the circumstances that will arise in the future.
5 out of 6 members of the Monetary Policy Committee have voted in favor of withdrawing the accommodation stance.

That’s why brakes were imposed on interest rates
Reserve Bank’s logic behind putting brakes on interest rates is that there are signs of improvement in global economic activity, headline inflation is coming down, but will remain above the target of Central Banks, health of banking and NBFC sectors in India Better and economic activities in India will remain flexible, as well as real GDP growth is estimated to be 7% in the financial year.
Due to the inflation of pulses, milk and fruits, the retail inflation rate has increased significantly since December. The core inflation rate also continues to rise. Headline inflation is expected to come down in 2023-24.
Shaktikanta Das said that from May 2022, the decisions of the Monetary Policy Committee are still affecting the system. That’s why the MPC has decided to put a brake on the interest rates this time so that the impact of the decisions taken so far can be assessed.
Shaktikanta Das said that we are trying to control inflation, the Monetary Policy Committee will take all necessary steps to control inflation if needed in future.
Inflation above our target
In the last 11 months, the Reserve Bank has increased the interest rates by 250 basis points, due to which the interest rates have increased from 4% to 6.50% in 11 months. The Reserve Bank Governor said that overall inflation is above our target, at its current level the current policy rate can still be considered accommodative. The policy rate is 6.5% but inflation is 6.4% according to February data.
Increased estimate regarding GDP
The Reserve Bank Governor has increased the real GDP growth forecast for FY24 to 6.5% from 6.4%. GDP growth is estimated to be 7.8% in the first quarter, 6.2% in the second quarter, 6.1% in the third quarter and 5.9% in the fourth quarter.

forecast of inflation
Shaktikanta Das said that inflation is still above the target of RBI. He has predicted the CPI inflation rate to be 5.2% in the current financial year. He said that RBI will keep an eye on volatility and inflation in the international financial market. Inflation is at risk of rising due to the negative impact of climate change on productivity.
As per RBI estimates, CPI inflation is expected to be 5.1% in Q1 of FY24, 5.4% in Q2, 5.4% in Q3 and 5.2% in Q4 of FY24.

In addition, the Standing Deposit Facility rate, which is 25 basis points below the repo rate, is 6.25%, the Marginal Standing Facility rate, which is 25 basis points above the repo rate, is 6.75%.
Shaktikanta Das said that the current account deficit in the first three quarters of FY23 stood at 2.7% of GDP. He said that the current account deficit is expected to come down in the fourth quarter of FY23.