RBI Pauses Repo Rate At 6.50% After 6 Consecutive Rate Hikes Since May 2022; FY24 Inflation Revised Down To 5.2%

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RBI Governor Shaktikanta Das says the global economy is witnessing a renewed phase of turbulence with fresh headwinds from the banking sector turmoil in advanced economies

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The RBI MPC on Thursday unanimously decided to keep the repo rate unchanged at 6.50 per cent. The pause comes after six consecutive rate hikes since May 2022, and the RBI has raised the repo rate by 250 bps since then. The RBI MPC also voted to remain focussed on ‘withdrawal of accommodation’ by 5:6 majority. This is to ensure that inflation aligns with target while focussing on growth.

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While presenting the first bi-monthly monetary policy statement of FY24, RBI Governor Shaktikanta Das on Thursday said, “The global economy is witnessing a renewed phase of turbulence with fresh headwinds from the banking sector turmoil in advanced economies.”

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SDF will remain unchanged at 6.25 per cent, and MSF and Bank Rates will be maintained at 6.75 per cent. The SDF is the lower band of the interest rate corridor, while the MSF is the upper band.

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On inflation, he said the global inflation has moderated in the recent month. In India, the RBI governor said that the retail inflation is expected to moderate to 5.2 per cent for FY24, from 5.3 per cent projected earlier. He also said the current financial year points towards softening of inflation; war against inflation to continue until there is durable decline.