RBI keeps Repo Rate unchanged at 6.5% once again, concerned about inflation
- IBJ Bureau
- Aug 11, 2023
Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday said that the central bank’s Monetary Policy Committee (MPC) decided to keep the key Repo Rate unchanged at 6.50 per cent in line with what economists had predicted.
This marks the third time that the six-member MPC has decided to keep the key rates unchanged.
“After detailed deliberations on all relevant aspects, the MPC decided unanimously to keep the policy Repo Rate unchanged at 6.50 per cent,” Mr Das said. Consequently, the Standing Deposit Facility (SDF) Rate remains at 6.25 per cent and the Marginal Standing Facility (MSF) Rate and the Bank Rate stand at 6.75 per cent.
Mr Das added that the MPC 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.
However, the RBI governor expressed concern about the sharp rise in inflation over the past few months and added that it had prompted the central bank to maintain a hawkish stance.
Explaining the rationale behind the MPC’s policy, Mr Das said: “Headline inflation, after reaching a low of 4.3 per cent in May 2023, rose in June and is expected to surge during July and August, led by vegetable prices.”