As it keeps a close eye on inflation, the Central Bank chose to leave the policy rate steady for a third time in a row.
Shaktikanta Das, governor of the Reserve Bank of India (RBI), announced on Thursday that the Monetary Policy Committee has unanimously decided to maintain the Repo Rate at 6.50 percent. As it keeps a close eye on inflation, the Central Bank chose to leave the policy rate steady for a third time in a row.
In making the announcement about the bi-monthly monetary policy, he stated, “Our economy has continued to grow at a reasonable pace, becoming the 5th largest economy in the world, contributing around 15% to global growth.”
Six rate increases in a row, totaling 250 basis points since May 2022, caused the rate increase cycle to stall in April.
According to him, the MPC will continue to monitor inflation and is unwavering in its resolve to bring inflation under control.
Das noted that although the interest rate was not changed, the headline inflation rate continued to be higher than the RBI’s target of 4%.
The MPC meeting was held in light of recent price increases in some food commodities as tomato, wheat, and rice as measured by the consumer price index (CPI).
The government has instructed the RBI to maintain CPI inflation at 4% with a 2% tolerance on either side.
