Mumbai: RBI Maintains Policy Rate at 6.5%, Economic Growth Forecast Unchanged
In a consistent move, the Reserve Bank of India (RBI) announced on Thursday its decision to retain the policy rate repo at 6.5 per cent, marking the third consecutive time without alteration. This decision implies that borrowers, including those seeking loans for homes and vehicles, will continue to experience unchanged monthly installments (EMIs). Additionally, the Central Bank upheld its economic growth projection for the ongoing fiscal year at 6.5 percent. However, a noteworthy adjustment was made to the inflation forecast for the fiscal year 2023-24, which has now been revised upwards to 5.4 percent.
Steadfast Decision after Monetary Policy Committee Meeting
The course of action was revealed following a three-day meeting held by the Monetary Policy Committee (MPC) that commenced on Tuesday. RBI Governor Shaktikanta Das provided insights into the outcomes of the meeting, asserting that despite prevailing global uncertainties, the Indian economy maintains its resilience. Governor Das stated, “After a comprehensive evaluation of prevailing circumstances, the Monetary Policy Committee has concluded to maintain the repo rate at 6.5 per cent.” The repo rate signifies the interest rate at which commercial banks borrow funds from the central bank to address their immediate financial requirements.
Consistency in Policy Rates
The RBI’s decision to uphold the repo rate remains consistent with the previous monetary policy reviews conducted in June and April. Notably, the repo rate has undergone six increments totaling 2.50 per cent since May of the previous year, primarily aimed at curbing inflationary pressures and maintaining economic stability.