RBI keeps Repo Rate unchanged at 6.5%

The Reserve Bank of India, today agreed on keeping the repo rate unchanged at 6.5 per cent.

The Reserve Bank of India, today agreed on keeping the repo rate unchanged at 6.5 per cent. This is the third time in a month that the rate has been kept unchanged in spite of the witness in rising inflation.

The decision came into light after the announcement was made by RBI governor, Shaktikanta Das.

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It was reported that according to him, the Indian economy has made progresses to control inflation and he said, “Monetary Policy Committee decided unanimously to keep the Repo Rate unchanged at 6.50 per cent.”

As part of its efforts to contain inflation, the has already raised interest rates in total by 250 basis points since May 2022. The Reserve Bank of India kept interest rates on hold for three consecutive times since the last policy review in April.

Votes by MPC showed a 5:6 majority for remaining focussed on the ‘withdrawal of accommodation’ which will ensure the inflation aligns with the target while focussing on growth.

As reported by the source MINTGENIE, the standing deposit facility (SDF) will also remain unchanged at 6.25 percent and the marginal standing facility (MSF) and bank rates also remain unchanged at 6.75 percent.

As per sources, the RBI Governor Shaktikanta Das, in his speech expressed that he is happy to see the Indian economy continuing to grow at a reasonable pace. It was further added by him that India’s strong fundamentals have laid the foundations of sustainable growth and can become the new growth engine for the world.

Shaktikanta Das also noted,”Cumulative rate hike of 250 bps from FY23 is working its way through the economy. MPC remains resolute in its commitment to align inflation with the 4 percent target and anchor inflation expectations. Global economy continues to face daunting challenges.”

He added by saying that food prices might witness uncertainty for the month of August, but correction on the part of vegetable prices might be seen after few months.

In view of rising food prices, the Reserve Bank upgraded its inflation forecast for fiscal year 24 to 5.4 per cent from 5.1 per cent previously. In addition, the forecast of CPI inflation for Q2 and Q3 has been raised while keeping its fourth quarter estimate unchanged.

The second quarter’s forecast was increased to 6.2 % from 5.2 % in the previous forecasts, while the third estimate has been revised up to 5.7 % from 5.4 %. However, the Consumer Price Index for Q4 was maintained at 5.2 percent. Forecasts have also been set for the consumer price index to be 5.2 percent in Q1FY25.