RBI Keeps Repo Rate Unchanged at 6.5% for Sixth Consecutive Time

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has unanimously decided to keep the policy repo rate unchanged at 6.5 per cent, reports said on Thursday.

With this, the status quo has been maintained for the sixth consecutive time.

The repo rate is the rate of interest at which RBI lends to other banks.

RBI Governor Shaktikanta Das maintained the policy stance, citing comfortable inflation and firm growth dynamics as reasons. He said that inflation is moving closer to the target and growth is holding better than expected.

The retail inflation in India is within the RBI's comfortable range of 2-6 percent, but it is higher than the preferred 4 percent level. In December, it was 5.69 per cent.

Further, Das said that the MPC has decided, by a majority of 5 out of 6 members, to remain focused on the withdrawal of accommodation. This is to ensure that inflation progressively aligns with the target while supporting growth.

The Indian economy expanded by 7.6 percent in the July-September quarter of the 2023-24 fiscal year, maintaining its position as the fastest-growing major economy. In the April-June quarter, India's GDP grew by 7.8 percent.

The three-day bi-monthly monetary policy committee (MPC) meeting of the RBI began on Tuesday. The RBI typically holds six meetings every two months in a fiscal year to discuss macroeconomic measures such as interest rates, money supply, and inflation projections.