The Reserve Bank of India (RBI) on Thursday kept the repo rate unchanged at 6.5 per cent. This was a unanimous decision by the Monetary Policy Committee (MPC), RBI Governor Shaktikanta Das said.
Indian economy and financial sector stand strong and resilient amid unprecedented global headwinds, Das said. Headline inflation is above the target of four per cent and expected to remain so during rest of the year.
“In India, Consumer Price Inflation eased during March-April 2023 and moved into the tolerance band, declining from 6.7% in 2022-23. Headline inflation, however, is still above the target as per the latest data and is expected to remain so according to our projections for 2023-24. As per our assessment, inflation will remain above 4% throughout 2023-24,” Das said.
The RBI governor added that domestic demand conditions remain supportive of growth. Urban demand resilient and rural demand on revival path, he said.
Analysts had predicted the central bank will keep the key lending rate unchanged since consumer inflation has cooled. Between May 2022 and February this year, the RBI raised the repo rate by 250 basis points (2.50 per cent) from 4.0 per cent to 6.50 per cent as it looked to reign in rising inflation.
