RBI monetary policy committee announces status quo, repo rate remains unchanged at 6.5%

The Reserve Bank of India (RBI) has decided to keep the policy rate unchanged for the fifth time amid strong economic growth and lingering concerns around inflation.

The monetary policy committee (MPC) kept the repo rate unchanged at 6.50 per cent after having raised it by a total 250 basis points (bps) since May 2022 in a bid to cool soaring prices.

“Monetary policy will remain actively disinflationary,” Reserve Bank of India (RBI) Governor Shaktikanta Das said.

The six-member monetary policy committee (MPC), consisting of three RBI and three external members, maintained the stance of Withdrawal of Accommodation

Upasana Bhardwaj, Chief Economist of Kotak Mahindra Bank said, “The MPC has retained focus on 4 per cent inflation being the medium target, with monetary policy actions to ensure disinflationary trends ahead. We continue to expect prolonged pause by the MPC." 

India's economy grew 7.6 per cent in Q2FY24, much faster than the polled median of 6.8 per cent and RBI's estimate of 6.5 per cent, helped by government spending and manufacturing, raising bets that Asia's third-largest economy will outperform its own estimates for the full year.

(With Reuters Inputs)