The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) announced on Friday its decision to keep the repo rate unchanged at 6.50% after a three-day deliberation.
“The standing deposit facility rate remains at 6.25%, and the marginal standing facility and the bank rate remain at 6.5%,” RBI governor Shaktikanta Das said, adding that the MPC is alert and prepared to take necessary actions that are needed.
The RBI also retained its policy stance of “withdrawal of accommodation” to ensure a gradual alignment of inflation with the committee’s target while remaining supportive of economic growth. Notably, 5 out of the 6 MPC members voted in favour of this stance
The central bank revised its economic growth forecast to 7%, up from the earlier projection of 6.5%, following a robust performance in the July-September quarter.
Over the past four bi-monthly monetary policies, the RBI refrained from altering the benchmark policy rate (repo). The last adjustment occurred in February, concluding the interest rate hike cycle that began in May 2022 due to the repercussions of the Russia-Ukraine conflict and subsequent disruptions in the global supply chain, leading to heightened inflation in India.
This decision to maintain the key repo rate at 6.5% marks the fifth instance when the 6-member Monetary Policy Committee (MPC) has chosen to keep interest rates unchanged.
Market reacted positively following the RBI’s decision, as seen in the performance of key indices. Nifty 50 index gained 0.37%, reaching 20,976.70 points, while Sensex climbed by 0.36% to 69,770.14 as of 10:30 am IST.
