RBI Keeps the Repo Rate Unchanged for the 4th Time this Fiscal Year The MPC kept the Repo Rate unchanged for a total of four MPC meetings this year so far. The previous change in the key rate took place in February 2023 when RBI hiked the repo rate by 25 basis points to 6.50 per cent.
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The Reserve Bank of India (RBI) on Friday announced its decision to keep the repo rate unchanged at 6.50 per cent. The decision was made unanimously by the Monetary Policy Committee (MPC), comprising RBI Governor Shaktikanta Das, Rajiv Ranjan, Ashima Goyal, Shashanka Bhide, Jayanth Varma, and Michael Patra. The committee held meetings for three consecutive days- 4th, 5th and 6th of October 2023.
"We have identified high inflation as a major risk to macro economy stability and sustainable growth. Accordingly, our monetary policy remains resolutely focused on aligning inflation to the 4 per cent target on durable basis," he shared.
The MPC kept the Repo Rate unchanged for a total of four MPC meetings this year so far. The previous change in the key rate took place in February 2023 when RBI hiked the repo rate by 25 basis points to 6.50 per cent.
Repo rate refers to the rate at which banks deposit money with RBI.
Additionally, Governor Das also shared the committee's decision to keep the standing deposit facility (SDF) rate, the marginal standing facility (MSF), and the Bank Rate unchanged at 6.25 per cent, 6.75 per cent and 6.75 per cent, respectively. These rates were also last changed in February this year.
The committee also decided with a majority of 5:1 to remain focused on the withdrawal of accommodation to ensure that the inflation progressively aligns with the targets while supporting growth.
Calling it a status-quo policy, Das stated several aspects of its approach to keeping the rate unchanged, "Headline inflation has 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. A silver lining, amidst all this, is declining core inflation, that is CPI inflation excluding food and fuel."
However, the overall inflation outlook looks grim due to uncertainties from the dip in Kharif sowing, lower reserved oil levels, and volatile global food and energy prices.