The Reserve Bank of India on Friday decided to keep the policy rate unchanged at 6.5 per cent for the fifth 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, 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 "actively disinflationary".

According to him, the growth projection has been raised to 7 per cent for the current financial year from 6.5 per cent earlier.

The central bank projected the Consumer Price-based Inflation (CPI) based retail inflation at 5.4 per cent for the current fiscal.

The MPC meeting took place against the backdrop of inflation declining to 4.87 per cent in October. The November print of inflation is expected to be released 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.