Mumbai : The Reserve Bank of India (RBI) 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.
The Governor said that the monetary policy should be in absolute readiness to tackle sudden food and fuel price rise. Indications are that food inflation may not see sustained easing in Q3, he said. Indian banking system continues to be resilient on back of improved asset quality, the Governor said.
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