The Reserve Bank of India on Friday decided to keep the policy rate unchanged for fourth time in a row as it maintains a tight vigil on inflation.
The rate increase cycle was paused in April after six consecutive rate hikes aggregating to 250 basis points since May 2022.
Announcing the bi-monthly monetary policy on Friday, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) unanimously decided to keep the repo rate unchanged at 6.5 per cent.
He said the MPC will remain watchful of the inflation and remains resolute in its commitment to align inflation to the targeted level.
According to him, the growth projection has been retained at 6.5 per cent for the current financial year with risks evenly balanced.
The MPC meeting took place against the backdrop of Consumer Price-based Inflation (CPI) touching 6.83 per cent in August. The September print of inflation is expected next week.
The government has mandated the RBI to keep CPI inflation at 4 per cent with a margin of 2 per cent on either side.
Following are the highlights of RBI's bi-monthly monetary policy:
- RBI retains benchmark rate (repo) at 6.5 per cent
- All 6 MPC members unanimously voted to keep repo rate unchanged
- RBI remains focused on withdrawal of accommodation support growth, tame inflation
- Cumulative repo rate hike of 250 bps still working its way through economy
- GDP growth forecast retained at 6.5 per cent for FY'24
- Inflation forecast too retained at 5.4 per cent for RY'24
- Cooling vegetable prices, cut in LPG rates to soften inflation
- RBI identifies high inflation as major risk to macroeconomic stability and sustainable growth
- India is poised to become new growth engine of world
- External financing requirements comfortable
- Limit of gold loan under Bullet Repayment Scheme for UCBs doubled to Rs 4 lakh
- Payments Infrastructure Development Fund scheme extended by 2 years to December 2025
- Next Monetary Policy Committee (MPC) meeting scheduled for December 6-8, 2023