RBI Keeps Key Lending Rate Unchanged At 6.5% For Third Time In Row

The central bank of the country today kept the key lending rate unchanged at 6.5% for the third time in a row, but said inflation rates are likely to rise led by vegetable prices.

Reserve Bank of India (RBI) Governor Shaktikanta Das said Monetary Policy Committee has unanimously decided to keep the policy repo rate unchanged. This means the loan interest rates too are likely to remain unchanged.

The Indian economy is exuding enhanced strength and stability despite global shocks, said the Governor, adding that it is contributing 15% to global growth. The country is uniquely placed to benefit from the ongoing transformational shifts, he said.

The RBI raised the inflation forecast for the current financial year from 5.1% to 5.4%, citing rising vegetable prices. The inflation rate shot up from 4.3% in May to 4.8% in June, with the figure expected to rise further in July and August.

“A spike in tomato prices led to accentuating food inflation in July,” said the Governor, stating that the price rise was short-term and it will reduce in the coming months.