RBI keeps repo rate unchanged at 6.5%; risks evenly balanced: Governor Shaktikanta Das

Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced the bi-monthly monetary policy for the financial year 2023-24.

The central bank maintained the status quo and kept the repo rate steady at 6.5%. This is the fourth time RBI has kept the repo rate unchanged.

“After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, RBI’s Monetary Policy Committee decided unanimously to keep the Policy Repo Rate unchanged at 6.5%,” Das said.

Das’ announcement came after the RBI’s six-member Monetary Policy Committee (MPC) held a meeting from October 4 to 6.

He added that retail inflation is projected at 5.4% for 2023-24 with the second quarter at 6.4%, Q3 at 5.6% and Q4 at 5.2%. “The risks are evenly balanced,” the governor pointed out.

“Headline inflation had surged in July driven by tomato and other vegetable prices. It corrected partly in August and is expected to see further easing in September on the back of moderation of these prices,” the governor said.

In his address, Das also said that the global economy is slowing under the impact of tight financial conditions, protracted geopolitical tensions and increasing geo-economic fragmentation. “Global trade is contracting, headline inflation is easing but rules above the target in major economies,” he said.

In contrast to global trends, Das said that domestic economic activity has exhibited resilience on the back of strong demand. “The momentum in agricultural activity in the second quarter of this financial year, i.e. 2023-24, has been sustained,” the governor added.