RBI MPC keeps repo rate unchanged at 6.5% for 7th time in a row
MUMBAI, APR 5 : The Reserve Bank of India (RBI) has decided to keep the key repo rate unchanged at 6.5% as its focus remains on bringing inflation under control.
This is the seventh straight time that the central bank’s 6-member Monetary Policy Committee (MPC) has decided to keep the key policy rates unchanged.
RBI Governor Shaktikanta Das said the MPC voted in favour of keeping the key lending rates unchanged.
“After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the Reserve Bank MPC decided by a majority of 5 to 1 to keep the policy repo rate unchanged at 6.50%,” Das said.
It may be noted that the standing deposit facility (SDF) also remains unchanged at 6.25% and the marginal standing facility at 6.75%.
The decision was largely in line with what economists had predicted.
Das said in his monetary policy statement that the priority of monetary policy continues to be the achievement of the 4% inflation target amidst robust growth.
He also highlighted the need for the monetary policy to maintain an actively disinflationary stance at this stage.
Upasna Bhardwaj, chief economist at Kotak Mahindra Bank told news agency Reuters that the MPC maintained status quo on expected lines. “While low core inflation provides comfort, the uncertainty on food inflation remains a worry,” she said.
“Further, the higher US yields, higher oil prices and other commodities along with possible delay in Fed’s rate easing cycle will keep the MPC wary. Accordingly, we do not see much scope for any rate easing until the second quarter of FY25,” Bhardwaj added.
Swati Saxena, Founder & CEO of 4 Thoughts Finance, a wealth management firm, said, “The industry overall wants policy stability and predictability above all else and a consistent maintenance of the repo rate indicates that the RBI is content with the existing level of interest rates.”
“Going ahead, we remain optimistic that the RBI will contemplate rate cuts and build shallow rate cut cycle from June onwards to support lower interest rates and credit demand. Overall, we believe that investor sentiment will continue to remain bullish, supported by the market’s persistent strength,” Saxena added.
-The India Today
