RBI’s Monetary Policy Committee (MPC) Keeps Repo Rate Unchanged at 6.5%

Ira Singh
Khabar Khabaron Ki,08 Feb’24

The Reserve Bank of India’s Monetary Policy Committee (MPC), led by Governor Shaktikanta Das on Thursday, has decided to maintain the repo rate at 6.5% for the sixth consecutive session,forecasts FY25 GDP growth at 7%. Inflation moderated, liquidity remains surplus. Rupee stable, forex reserves $622.5 billion.

This decision comes amidst a backdrop of global economic uncertainties and domestic inflationary pressures.The MPC also decided with majority of 5:1 to remain focused on withdrawal of accommodation keeping the stance unchanged.The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

A persistently high inflation has been a major point of worry for the policymakers. Soaring prices, particularly that of essential food items, have been hurting poor households affecting their ability to purchase goods and services.

This is the sixth consecutive pause in the last year. Since the April monetary policy in 2023, the RBI has kept the repo rate unchanged at 6.5 percent, after raising it by 250 basis points (bps) in May 2022. This was after inflation showed signs of moderating. One basis point is one-hundredth of a percentage point.