RBI MPC Meeting Decides To Keep Repo Rate Unchanged At 6.5%: Governor Shaktikanta Das

Additionally, the Governor informed that the committee decided to remain focused on withdrawal of accomodation, and 5 members voted in favour of the decision.

The Reserve Bank of India's (RBI's) monetary policy committee (MPC) headed by Governor Shaktikanta Das on Friday revealed that it has decided to keep the repo rate unchanged at 6.5 per cent. This marked the fifth consecutive time that the central bank chose to maintain a pause on increasing the rate. 

Announcing the address, Das said that the MPC unanimously voted to keep the interest rate unchanged. Additionally, the Governor informed that the committee decided to remain focused on withdrawal of accomodation, and 5 members voted in favour of the decision.

Further, the Standing Deposit Facility and Marginal Standing Facility rates remained unchanged at 6.25 per cent and 6.75 per cent respectively. The Governor explained that this move was taken 'to ensure inflation progressively aligns to the target while supporting growth'. 

Das added that the Indian economy today represents a picture of resilience, momentum and its fundamentals remain strong. Providing further inputs about the economy, he said that a broad-based easing remained prevalent in core inflation, while food inflation faces certain risks. However, the domestic economic activities have fared well, he said, reported PTI.

Further, the central bank estimated the Consumer Price Index (CPI) based retail inflation to remain at 5.4 per cent in the current fiscal year. Earlier, the growth projection for FY24 was increased to 7 per cent from 6.5 per cent. Notably, the MPC meet happened against the backdrop of inflation reducing to 4.87 per cent in October, while the data for inflation in November is set to be announced next week. The government has mandated the RBI to maintain CPI inflation at 4 per cent, with a margin of 2 per cent on either side. 

Analysts earlier estimated that the regulator will opt to maintain a pause on the repo rates in light of the favourable GDP data logged by the Indian economy in the second quarter of the current fiscal year. Aditi Nayar, chief economist, ICRA, earlier said, "With the GDP data for the second quarter of 2023-24 appreciably higher than the MPC's last forecast, and continuing concerns on various aspects of food inflation, we expect the MPC to pause in its December 2023 review, amidst a fairly hawkish tone of the policy document."

Additionally, the Governor also announced changes regarding the regulatory framework for cloud facility in the financial sector in the country, and the limits on UPI transaction, among others.

The MPC meeting began its bi-monthly review on Wednesday. The RBI generally holds six bi-monthly meetings in every financial year to discuss interest rates, money supply, inflation rates, and other macroeconomic indicators.

The next RBI policy meet is scheduled for February 6-8.