Governor of the Reserve Bank of India Shaktikanta Das declared on Friday that the bank has opted to keep things as they are and keep the repo rate at 6.5%. The central bank has chosen to maintain the repo rate at 6.5 percent for the seventh time in a row.
Das stated that the Monetary Policy Committee (MPC) has chosen to maintain the repo rate at its current level, announcing the first bi-monthly monetary policy for the current fiscal year. After six rate increases in a row totaling 250 basis points since May 2022, the rate increase cycle was put on hold in April of last year.
By a majority vote of 5 to 1, the six-member rate-setting panel upheld the current interest rate situation while continuing to emphasise the removal of the accommodating posture. The Consumer Price-based Inflation (CPI) was 5.1% in February.
The RBI is required by the government to maintain CPI inflation at 4% with a 2% margin of error. The governor of the RBI stated that they are on the lookout for food inflation.
For the current fiscal year, the central bank has forecast a 7 percent increase. Inflation was also predicted to be 4.5 percent.
According to Das, India’s foreign exchange reserves hit a record high of $645.6 billion on March 29, 2024.