RBI Keeps Repo Rate Unchanged At 6.5% For Fifth Consecutive Time

The Reserve Bank of India (RBI) on Friday opted to maintain the policy rate at 6.5 percent for the fifth consecutive time, signalling a continued emphasis on inflation control. The decision follows a pause in the rate increase cycle initiated in April, which comprised six consecutive rate hikes totaling 250 basis points since May 2022. RBI Governor Shaktikanta Das, in announcing the bi-monthly monetary policy, highlighted the Monetary Policy Committee's unanimous choice to keep the repo rate steady at 6.5 percent, emphasizing an "actively disinflationary" stance. The growth projection for the fiscal year has been revised upward to 7 percent from the earlier 6.5 percent. RBI projects Consumer Price-based Inflation (CPI) at 5.4 percent for the current fiscal year. Against a backdrop of declining inflation to 4.87 percent in October, the MPC meeting anticipates the November inflation figures to be released next week. The government mandates the RBI to maintain CPI inflation at 4 percent with a 2 percent margin on either side.

RBI retains repo rate | Key Points

1. The Reserve Bank of India, in its latest bi-monthly monetary policy, has decided to maintain the policy rate at 6.5%, marking the fifth consecutive unchanged decision.

2. The decision comes after a pause in the rate increase cycle in April, following six consecutive rate hikes that totaled 250 basis points since May 2022.

3. RBI Governor Shaktikanta Das, in the announcement, revealed that the Monetary Policy Committee (MPC) unanimously opted to keep the repo rate steady at 6.5%.

4. Emphasizing an "actively disinflationary" stance, Das highlighted the MPC's commitment to monitoring and controlling inflation.

5. The growth projection for the current financial year has been revised upward to 7%, up from the earlier estimate of 6.5%, according to the governor.

6. The central bank's projection for Consumer Price-based Inflation (CPI) stands at 5.4% for the ongoing fiscal year.

7. The MPC meeting occurred against the backdrop of a decline in inflation to 4.87% in October, with the November inflation data expected to be released soon.

8. The government has tasked the RBI with maintaining CPI inflation at 4%, allowing for a margin of 2% on either side.

9. RBI's decision reflects a cautious approach, balancing economic growth considerations with the need to manage inflation within the government-mandated target range.

10. The continuity of the unchanged policy rate underscores the central bank's commitment to stability and its vigilant stance on inflation control.

(With Agency Inputs)