NEW DELHI: The Reserve Bank of India (RBI) on Thursday once again hit the pause button and decided to keep key benchmark policy rate at 6.5%.
Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said the Monetary Policy Committee has unaniamously decided to keep repo rate unchanged.
“MPC voted unanimously to leave repo rate unchanged at 6.5%. MPC voted 5 members to 1 to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target,” Shaktikanta Das said.
“Consequently, the Standing Deposit Facility (SDF rate) remains at 6.25% and the marginal standing facility and the bank rates stand at 6.75%,” he added.
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The RBI governor further said that the Monetary Policy Committee also decided by a majority of five out of six members to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target while supporting growth.
Inflation projection has been slashed marginally to 5.1 per cent from earlier estimate of 5.2 per cent for current financial year.
Das said, in the second quarter of 2023, the global economy is sustaining the momentum gained in the preceding quarter in spite of still elevated though moderating inflation, tighter financial conditions, banking sector stress, and lingering geopolitical conflicts.
The RBI has raised the repo rate by a total of 250 basis points since May 2022 to keep inflation in check, before opting for a pause at the previous meeting.
India’s retail inflation eased to an 18-month low of 4.70% in April, well below the RBI’s upper tolerance level. Economists expect the next few readings to be comfortably below the 6% threshold, bolstering hopes of a sustained pause in the rate cycle.
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