- RBI maintains repo rate at 6.5% for the third consecutive time, signaling stability in monetary policy.
- RBI emphasizes gradual withdrawal of support to manage inflation, with majority MPC support for keeping inflation around 4%.
- MPC revises inflation forecast to 5.4%, while sustaining confidence in India’s 6.5% economic growth projection for FY2023-24.
In a decisive move, the Reserve Bank of India (RBI) has chosen to maintain the existing repo rate at 6.5 per cent, marking the third consecutive occasion of no alterations. This decision was confirmed following a comprehensive three-day deliberation by the Monetary Policy Committee (MPC), as announced by RBI Governor Shaktikanta Das.
Explaining the rationale behind the unchanged key policy rate, Governor Das shed light on the cumulative impact of previous rate adjustments. A total increment of 250 basis points has influenced the economy, contributing to its current trajectory. Despite subdued global demand, Governor Das conveyed his optimism regarding the Indian economy’s robust performance and its continued forward momentum.
“We hold a steadfast commitment to ensuring inflation remains controlled and preserving economic stability,” affirmed Governor Das.
Amidst the current landscape, the MPC has revised its inflation projection upwards to 5.4 per cent. This adjustment is attributed primarily to the escalating costs of fundamental commodities like vegetables, grains, and pulses. Parallelly, the prediction for India’s economic growth in the fiscal year 2023-24 remains steadfast at 6.5 per cent, consistent with the initial projection revealed during the June meeting. This forecast envisions growth rates of 8.0 per cent for Q1, 6.5 per cent for Q2, 6.0 per cent for Q3, and 5.7 per cent for Q4.
All in all, the RBI’s decision to maintain the repo rate reflects a steady and cautious approach. As India continues its economic journey, the focus on controlling inflation and nurturing growth sets a positive course for the times ahead.