The Reserve Bank of India (RBI) on Wednesday kept the policy repo rate steady at 6.5% for the tenth time in a row. Following the Monetary Policy Committee (MPC) meeting, RBI Governor Shaktikanta Das announced that the decision was supported by five out of six MPC members.
Other key rates also remained unchanged, with the standing deposit facility (SDF) rate at 6.25% and both the marginal standing facility (MSF) rate and the bank rate at 6.75%.
Das also highlighted a shift in the RBI’s monetary policy stance, moving from ‘withdrawal of accommodation’ to ‘neutral’. “The MPC has decided to change the stance of monetary policy to neutral while remaining unambiguously focused on a durable alignment of inflation with the target, alongside supporting growth,” he said.
Although inflationary risks persist, particularly due to rising global crude oil prices and uncertainties in global markets, the RBI aims to respond flexibly to both inflationary trends and growth objectives. This neutral stance gives the central bank room to adjust policies without making hasty decisions.
The committee’s decision comes at a time when India’s inflation rate, according to the All India Consumer Price Index (CPI), had eased to 3.65% in August, within the RBI’s target range of 2-6%. However, food inflation remains elevated at 5.65%, exceeding the medium-term target of 4%. Additionally, geopolitical tensions in West Asia are driving up global oil prices, further contributing to inflation concerns.
(ANI)