The Reserve Bank of India (RBI) announced on Thursday that it will maintain the repo rate at 6.5%, marking the ninth consecutive time the central bank has kept the key interest rate unchanged. The decision reflects the RBI’s cautious stance amid ongoing economic uncertainties and persistent inflationary pressures.
RBI Governor Shaktikanta Das revealed the decision following a three-day Monetary Policy Committee (MPC) meeting. “After a detailed assessment of the evolving macroeconomic and financial conditions and the overall outlook, the MPC decided by a majority of four members to keep the policy repo rate unchanged at 6.5%,” Governor Das said in a press briefing.
He added, “The standing deposit facility rate remains at 6.25% and the marginal standing facility rate and the bank rate at 6.75%. The MPC also decided by a majority of four out of six members to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target while supporting growth. So as you can see, there is this good amount.”
This decision comes as inflation continues to hover above the RBI’s target range, with food inflation posing a particular challenge. The central bank remains committed to bringing inflation down to its 4% target, balancing this goal with the need to support economic recovery.
Governor Das emphasized that the RBI remains vigilant regarding inflationary pressures and will take necessary actions to maintain price stability while supporting the country’s economic recovery. The MPC’s decision reflects a balanced approach, aiming to control inflation without stifling growth.
The RBI governor warned that there should not be any room for complacency because core inflation has fallen considerably as continuing food price shocks have slowed the process of disinflation in Q1.
The announcement was made by RBI Governor Shaktikanta Das at a press briefing on Thursday, following the conclusion of a three-day Monetary Policy Committee (MPC) meeting. The decision was reached after a detailed assessment of the current macroeconomic and financial conditions, as well as future economic projections.
(Inputs from ANI)