RBI MPC Policy | Still waiting for cheap loan, RBI did not change the interest rates, Repo rate will remain at 6.5%

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said the central bank’s Monetary Policy Committee (MPC) has decided to keep the key repo rate steady at 6.5 per cent. This decision is broadly in line with the expectations of economists. The decision to keep the key repo rate at 6.5 per cent is the fifth instance when the 6-member Monetary Policy Committee (MPC) has opted to keep interest rates unchanged.

“After a detailed assessment of the evolving macroeconomic financial developments and outlook, the Monetary Policy Committee unanimously decided to keep the policy repo rate unchanged at 6.5 per cent,” Shaktikanta Das said. “Consequently, the standing deposit facility rate remains at 6.25 per cent and the marginal standing facility and bank rate remains at 6.5 per cent,” he said. Das said 5 of the 6 MPC members decided to keep the focus on “rebounding of housing” to ensure inflation aligns with the target (4 per cent) while progressively supporting growth.

The RBI Governor highlighted that the decline in inflation across all components of retail inflation is one of the reasons behind the MPC’s decision to keep the repo rate unchanged. “Core inflation has moderated broadly, indicating successful disinflation through monetary policy actions,” he said.

However, he highlighted that the near-term inflation outlook is “clouded” by food inflation risks, which could lead to increases in November and December. “There is a need to keep an eye on this for second-round effects, if any,” he said.

Governor Das also highlighted that the country’s domestic activity is “doing well”, as reflected in the GDP growth in the second quarter of the current financial year.

“In this backdrop, the MPC has decided to keep the policy repo rate unchanged at 6.5 per cent, but will remain highly vigilant and ready to take appropriate policy action,” Das said.