The majority of financial markets had anticipated the Reserve Bank of India to maintain the repo rate at 6.5 percent during its three-day monetary policy committee meeting.
RBI Governor Shaktikanta Das on Thursday at a press conference said, “Monetary Policy Committee decided unanimously to keep the Repo Rate unchanged at 6.50%”
RBI typically conducts six bi-monthly meetings in a financial year, where it decides interest rates, money supply, inflation outlook, and various macroeconomic indicators. The ongoing three-day and the third meeting of 2023-24 started on Tuesday.
The monetary policy committee of the central bank unanimously decided to maintain the repo rate at 6.5 percent at its previous meeting in early June, as most analysts had predicted. The repo rate was paused by the RBI at its meeting in April as well. The interest rate at which the RBI lends money to other banks is known as the repo rate.
A consistent decline in inflation (currently at an 18-month low) and its potential for further decline may have prompted the central bank to put the brake on the key interest rate again. Inflation has been a concern for many countries, including advanced economies, but India has managed to steer its inflation trajectory quite well.