RBI keeps interest rate unchanged at 6.5 per cent, maintains pause for a third time
MUMBAI,AUG 10.: The Reserve Bank of India on Thursday decided to keep the policy rate unchanged for the third time in a row as it maintains heightened vigil on inflation.
The rate increase cycle was paused in April after six consecutive rate hikes aggregating to 250 basis points since May 2022.
Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) unanimously decided to keep the rate unchanged at 6.5 per cent.
He said the MPC will remain watchful of the inflation and remains resolute in its commitment to align inflation to the targeted level.
While keeping the interest rate intact, Das said headline inflation still remains above RBI’s target of 4 per cent.
The MPC meeting took place against the backdrop of consumer price-based (CPI) inflation on some food items like tomato, wheat and rice that have witnessed surge in price in the last few weeks.
The government has mandated RBI to ensure CPI inflation at 4 per cent with a margin of 2 per cent on either side.
Key takeaways from RBI Governor’s address
Unanimous decision by MPC to keep interest rate unchanged at 6.5 pc
Growth projection retained at 6.5 pc for FY24 with risks evenly balanced
Headline inflation remains higher than the 4 pc target
Flow of resources to commercial sector increased to Rs 7.5 lakh crore this year from Rs 5.7 lakh crore last year
Retail inflation projection increased to 5.4 pc during FY24 from earlier estimate of 5.1 pc due to vegetable price shocks
RBI projects Q2 retail inflation at 6.2 pc; Q3 at 5.7 pc and Q4 at 5.2 pc in FY 2023-24
Cash Reserve Ratio (CRR) remains unchanged at 4.5 per cent
Net FDI fell to USD 5.5 bn during Apr-May compared to USD 10.6 bn in corresponding period last year
Indian rupee has remained stable since January 2023; forex reserves crosses USD 600 bn
Indian economy exuding enhanced strength and stability
Indian economy has made significant progress towards controlling inflation
Spike in tomato prices and rise in cereal, pulses contributed to inflation; vegetable prices may see significant correction
India placed to benefit from ongoing transformational shift in global economy
India expected to withstand external headwinds on economic growth front
Global economy continues to face daunting challenges of inflation, geo-political uncertainty and extreme weather conditions
Crude oil prices have hardened in recent weeks and its outlook is clouded by demand-supply uncertainties.
Level of surplus liquidity has gone up due to withdrawal of Rs 2000 banknotes, and dividend to government
RBI is steadfast in its commitment to safeguard financial system from emerging and potential challenges
Indian financial sector has been stable and reselient as is being reflected in sustained growth numbers
Current Account Deficit to remain imminently manageable in current fiscal aided by services export and high inflow of remittances
RBI to remain focused on withdrawal of accommodative policy stance
RBI proposes framework for allowing borrowers to switch to fixed interest rate regime
RBI to allow offline payment of UPI by using near-field communication
RBI raises payment limit via UPI lite to Rs 500 from Rs 200
Vigil on evolving inflation heightened due to Monsoon situation; inflation has moderated, but job still not done, says RBI.
-PTI
