RBI projects growth to hit 7 per cent this fiscal, repo rate unchanged

Jaipur, December 2023.

Reserve Bank of India’s (RBI) decision to keep key interest rates unchanged for the fifth consecutive time.The NSE Nifty 50 index saw a rise of 0.37%, reaching 20,976.70 points, and the S&P BSE Sensex increased by 0.36%, hitting 69,770.14 points by 10:10 am IST.

The RBI chose to maintain the key repo rate at 6.50%, a decision influenced by strong economic growth and the anticipation of rising food prices in the upcoming months.

Mr. Virat Diwanji, Group President and Head – Consumer Bank, Kotak Mahindra Bank Ltd Said ‘’The RBI monetary policy is on the lines of the wider market expectation. However, the GDP growth projection at 7% is higher than anticipated but seems clearly inspired by the stellar show in the Sept quarter GDP numbers. With the robustness seen across the economy, including the likelihood of a lesser drag on the exports front and private consumption remaining buoyant, the target seems achievable.

Given this assured rate environment, the loan demand will continue to be strong even though there are concerns about the impact of the risk weightage changes on unsecured lending that might lead to a slowdown there. For the consumer banking, the scenario looks very promising. The rural consumption is improving, adding to the resilience of the Indian economy.