Reserve Bank of India (RBI) once again hit the pause button and decide to keep key benchmark policy rate at 6.5%. Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said Policy Committee has unaniamously decide to keep repo rate unchange.
Shaktikanta Das said :
“MPC voted unanimously to leave repo rate unchanged at 6.5%. MPC voted 5 members to 1 to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target,”.
“Consequently, the Standing Deposit Facility (SDF rate) remains at 6.25% and the marginal standing facility and the bank rates stand at 6.75%,”.
The RBI governor Shaktikanta Das said that the Monetary Policy Committee also decide by a majority of five out of six members to remain focus on the withdrawal of accommodation to ensure that inflation progressively aligns with the target while supporting growth.
Inflation projection has slash marginally to 5.1% from earlier estimate of 5.2% for current financial year.
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Shaktikanta Das said, in the second quarter of 2023, the global economy is sustaining the momentum gain in the preceding quarter in spite of still elevated though moderating inflation, tighter financial conditions, banking sector stress, and lingering geopolitical conflicts.
The RBI has raise the repo rate by a total of 250 basis points since May 2022 to keep inflation in check, before opting for a pause at the previous meeting.
India’s retail inflation ease to an 18-month low of 4.70% in April, well below the RBI’s upper tolerance level.
Economists expect the next few readings to be comfortably below the 6% threshold, bolstering hopes of a sustain pause in the rate cycle.
