The Indian benchmark indices on Thursday traded steady with the focus on the Reserve Bank of India’s (RBI) decision from its bi-monthly monetary policy review.
RBI Governor Shaktikanta Das read out the monetary policy meeting outcome at 10 am today. As a majority of analysts expected, the RBI has decided to continue to keep the repo rate unchanged at 6.5 per cent.
This was amid a consistent decline in inflation which is currently at an 18-month low and its potential for a further dip which is likely to have prompted the RBI to put the brakes on the repo rate again.
It may be noted that the RBI in its previous meeting in April this year had kept the repo rate paused at 6.5 per cent as well. Prior to that, the RBI had raised the repo rate, the interest rate at which it lends to banks by 250 basis points cumulatively to 6.5 per cent since May 2022 to fight the rising inflation.
Rising of interest rates is a monetary policy instrument that typically helps in suppressing the demand in the economy, in turn helping the inflation rate decline.
Apart from keeping the repo rate unchanged, the RBI was also expected to give a fresh outlook on the growth and inflation 2023-24 after GDP numbers for 2022-23 came above estimated figures.
The real GDP growth for the year 2022-23 stood at 7.2 per cent, which is higher than the seven per cent that had been projected, according to the provisional estimates that were released by the National Statistical Office (NSO) recently.
