Mumbai, December 8: The Reserve Bank of India (RBI) opted to maintain the policy rate at 6.5 percent for the fifth consecutive time on Friday, demonstrating a continued focus on inflation monitoring. The decision to pause the rate increase cycle was initiated in April, following six consecutive rate hikes that amounted to 250 basis points since May 2022.
During the announcement of the bi-monthly monetary policy, RBI Governor Shaktikanta Das stated that the Monetary Policy Committee (MPC) had unanimously agreed to keep the repo rate steady at 6.5 percent. Emphasizing an “actively disinflationary” approach, Das highlighted an upward revision in the growth projection to 7 percent for the current financial year, up from the previous estimate of 6.5 percent.
The central bank’s projection for Consumer Price Index (CPI)-based retail inflation for the ongoing fiscal year stands at 5.4 percent. The MPC convened amidst a backdrop of inflation declining to 4.87 percent in October, with the November inflation figures expected to be released next week.
It’s worth noting that the government has tasked the RBI with maintaining CPI inflation at 4 percent, with a permissible margin of 2 percent on either side.
