The Reserve Bank of India (RBI) announced Friday that its monetary policy committee (MPC) has unanimously voted to keep the benchmark repo rate unchanged at 6.5% in a widely expected move.
This marks the fifth straight bi-monthly review meeting where the rate has been left on hold, as the central bank maintains its focus on withdrawing accommodation while supporting growth.
RBI Governor Shaktikanta Das said the decision was taken to ensure inflation progressively aligns toward the target 4% mark while citing the economy’s resilience and strong fundamentals.
The repo rate pause comes as inflation eased to 4.9% in October. The RBI projects it will remain around 5.4% in the 2023-24 fiscal year. Earlier the bank raised its FY24 growth forecast to 7% from 6.5%.
While risks remain on food inflation, core inflation has shown a broad-based easing. The RBI remains watchful on price rises even as economic activity holds up well, Das noted.
Analysts widely predicted the hold decision after recent data showed inflation cooling and GDP growth beating estimates. ICRA Chief Economist Aditi Nayar called it amid a hawkish policy tone.
The RBI monetary panel also announced changes to regulate cloud computing in finance and raise UPI transaction limits to ₹0.2 million. RBI meetings survey the macroeconomic landscape and chart monetary policy stance.
With inflation seen on a glide path to the target, the MPC can afford to pause rate hikes but stays ready to act if prices spiral. The next policy review falls on Feb. 6-8.
