PTC News Desk: The Reserve Bank of India's (RBI) Monetary Policy Committee unanimously decided to keep the policy repo rate at 6.5 percent at its December review meeting, maintaining the status quo for the fifth consecutive time.
When deliberating the policy statement on Friday morning, RBI Governor Shaktikanta Das cited decreasing inflation as a reason for keeping the policy stance unchanged.
Retail inflation in India eased further in October, supported by a relative decline in some sub-indexes. The October consumer price index (CPI) was 4.87 percent, down from 5.02 percent the previous month. Retail inflation in India, on the other hand, is within the RBI's 2-6 percent comfort zone but above the ideal 4 percent.
Das also stated that the MPC decided by a majority of 5 out of 6 members to maintain its focus on gradually withdrawing accommodation to ensure that inflation over time aligns with the target while supporting growth.
Das also mentioned strong GDP growth in the second quarter.
During the July-September quarter of the current fiscal year 2023-24, the Indian economy grew 7.6 percent, keeping it as the fastest-growing major economy. The April-June quarter GDP growth in India was 7.8 percent.
The RBI's bimonthly monetary policy committee (MPC) meeting began on Wednesday. In a typical fiscal year, the RBI holds six bimonthly meetings to discuss interest rates, the money supply, the inflation outlook, and various macroeconomic indicators.
The monetary policy committee unanimously decided to keep the policy repo rate unchanged at 6.5 percent for the fourth time in a row at its October review meeting, thus maintaining the status quo.
It has kept the repo rate at 6.5 percent unchanged in the last four meetings. The repo rate is the interest rate at which the RBI lends to other banks.