In a significant monetary policy decision, the Reserve Bank of India opted to maintain the policy rate unchanged for the fourth consecutive time, demonstrating a steadfast commitment to monitoring inflation. The central bank had previously halted its rate increase cycle back in April, following a series of six successive rate hikes totaling 250 basis points since May 2022.
During the announcement of the bi-monthly monetary policy, RBI Governor Shaktikanta Das disclosed that the Monetary Policy Committee (MPC) had unanimously agreed to retain the repo rate at its existing level of 6.5 percent. He emphasized the MPC’s continued vigilance over inflation and its unwavering dedication to bringing it in line with the targeted level. Additionally, Das revealed that the growth projection for the current financial year would remain steady at 6.5 percent, with risks evenly balanced.
This decision was made against the backdrop of Consumer Price-based Inflation (CPI) reaching 6.83 percent in August, and anticipation of the September inflation figures due next week. It’s important to note that the government has mandated the RBI to maintain CPI inflation at 4 percent with a margin of 2 percent on either side, underscoring the central bank’s critical role in stabilizing the nation’s economic health.
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