Economy

RBI keeps repo rate unchanged at 6.5 pc, changes stance to neutral to align inflation with growth

Reserve Bank of India (RBI) Governor Shaktikanta Das announced during the Monetary Policy Committee (MPC) meeting that the central bank has decided to keep the policy repo rate unchanged at 6.5 per cent for the 10th consecutive time, on Wednesday.

The decision was made with a majority vote of 5 out of 6 MPC members. The standing deposit facility (SDF) rate remains steady at 6.25 per cent, while the marginal standing facility (MSF) rate and the bank rate are both maintained at 6.75 per cent.

Das also highlighted a shift in the RBI’s monetary policy stance, moving to a neutral approach. “The MPC has decided to change the stance of monetary policy to neutral while remaining unambiguously focused on a durable alignment of inflation with the target, alongside supporting growth,” he stated.

This neutral stance reflects the RBI’s balancing act in managing inflationary pressures while ensuring that economic growth is not compromised.

The central bank’s focus remains on achieving a stable inflation rate, aligned with its long-term target, while fostering sustainable economic expansion.

With inflation risks persisting amid global economic uncertainties, the RBI’s approach will allow it the flexibility to respond to both inflationary trends and growth needs without making premature policy shifts.

The meeting, which commenced on October 7, has drawn considerable attention as the RBI has consistently held the repo rate at 6.50 per cent over the past nine meetings, carefully balancing inflation risks with the need to support economic growth.

The Monetary Policy Committee (MPC) is assessing key factors such as persistent inflationary pressures, particularly in food prices, and global economic uncertainties. According to data from the Ministry of Statistics & Programme Implementation, although All India Consumer Price Index (CPI) inflation eased to 3.65 per cent in August–within the RBI’s 2-6 per cent target range–food inflation remains high at 5.65 per cent, exceeding the central bank’s medium-term target of 4 per cent.

Additionally, rising global crude oil prices, driven by geopolitical tensions in West Asia, have further heightened inflationary concerns.

Despite these challenges, the RBI has maintained its stance on the repo rate, focusing on fostering economic recovery following the pandemic.

ANI

Ani service

Recent Posts

Lebanon: Israel conducts precision airstrikes on Hezbollah’s UAV production, storage sites and drone workshop

Israeli Defence Forces (IDF) shared operational details of conducting precision strikes at Hezbollah targets in…

5 hours ago

Productive discussions on connectivity, security, terrorism: Jaishankar at India-Central Asia Dialogue

External Affairs Minister S Jaishankar, chairing the 4th India-Central Asia Dialogue in Delhi on Thursday,…

6 hours ago

Tata Electronics, BEL join hands to advance India’s electronics, semiconductors ecosystem

Tata Electronics and state-owned firm Bharat Electronics (BEL) have joined hands to advance the development…

6 hours ago

Israel’s Defence Minister slams Lebanese President for criticizing strikes on Hezbollah

Israel's Defence Minister Israel Katz responded to criticism leveled at Israel by Lebanese President Joseph…

7 hours ago

ETGE alleges Uyghur militants in Syria exploited by Chinese Intelligence, seeks US support

The East Turkistan Government in Exile expresses deep concern regarding the purported incorporation of Uyghur…

8 hours ago

“All good work is indeed left for me only to complete,” says PM Modi as he inaugurates major railway projects in J-K

Noting that the newly inaugurated Chenab and Anji Bridges will not only connect Jammu and…

8 hours ago