RBI’s 2nd Bi-Monthly MPC Meeting 2024

Current Context: The Reserve Bank of India’s (RBI) 2nd Bi-Monthly Monetary Policy Committee (MPC) Meeting 2024.

• Dates of the Meeting: The MPC met from June 5 -7, 2024.
• Repo Rate: The repo rate under the Liquidity Adjustment Facility (LAF) was kept unchanged at 6.50% for the 8th consecutive time.
• GDP Growth Forecast: The real Gross Domestic Product growth forecast was raised from 7% to 7.2% for FY25. The GDP for Q1 is projected at 7.3%, Q2 at 7.2%, Q3 at 7.3% and Q4 at 7.2%.
• Inflation Forecast: The Consumer Price Index (CPI) or retail inflation for 2024-25 is projected at 4.5% with Q1 at 4.9%, Q2 at 3.8%, Q3 at 4.6% and Q4 at 4.5%.
• Policy Rates: The Fixed Reverse Repo Rate is 3.35%, Standing Deposit Facility (SDF) Rate is 6.25%, Marginal Standing Facility (MSF) Rate is 6.75%, Bank Rate is 6.75%, Cash Reserve Ratio (CRR) is 4.50%, and Statutory Liquidity Ratio (SLR) is 18%.
• Contingent Reserve Buffer: The risk provisioning under the contingent reserve buffer (CRB) was increased to 6.5% of the Reserve Bank’s balance sheet for 2023-24 from 6.0% in 2022-23.
• Surplus Transfer: RBI has decided to transfer Rs.2.11 lakh crore as surplus to the Central Government for the accounting year 2023-24.

Question:

1 What was the Repo Rate under the Liquidity Adjustment Facility (LAF) during the meeting?

• A) 6.0%
• B) 6.25%
• C) 6.50%
• D) 6.75%

Answer: C) Repo Rate: The repo rate under the Liquidity Adjustment Facility (LAF) was kept unchanged at 6.50% for the 8th consecutive time.