Unchanged repo rate boost jewellery sales in India

Recently the RBI issue their Monetary Policy Statement, 2023-24, and announce their Resolution of the Monetary Policy Committee (MPC) of February 6 to 8, 2024. On the basis of an assessment of the current and evolving macroeconomic situation, the Monetary Policy Committee (MPC) at its meeting (February 8, 2024) decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent.

Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent. These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4 per cent within a band of +/- 2 per cent, while supporting growth.

In the row, Colin Shah, MD, Kama Jewelry said on the RBI’s Monetary Policy decision that, “RBI’s decision to keep the repo rate unchanged at 6.50% is a welcome move which comes as per the industry expectations. With the urban consumption remaining consistently robust along with rural demand gaining momentum, this scenario will act as an enabler in boosting jewellery sales in Indian markets.

However, the growing geopolitical tensions remains a concern that could impact the supply chain and put pressure on commodity prices, which will eventually hamper the exports. Further, RBI’s decision to allow resident entities to hedge price of gold in OTC segment in IFSC will help entities to safeguard themselves against the price fluctuations and the adverse currency movement. In terms of pricing of the yellow metal, it is expected to remain volatile in the near future which will further be guided by factors like inflation trajectory, strength of the USD, geo-political scenario and any economic development in the West.”

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top