No change in repo rate

Chennai: The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) on Thursday unanimously decided not to revise the repo rate, the central bank's Governor Shaktikanta Das announced.

The MPC decided to keep the repo rate -- the rate at which RBI lends to the banks -- at 6.5 per cent taking into account the macroeconomic conditions.

In the same vein, the RBI Governor added the war against inflation to continue till the decline in inflation rate is closer to the target -- 4 per cent. "We are on the right track to bring down the inflation rate," Das said, adding that the MPC will not hesitate to take further action to fight inflation. According to him, the decision to hold on the repo rate is only a 'pause' and not a 'pivot'. The Indian inflation rate is 6.4 per cent as per February 2023 data and in FY24 it is expected to moderate, he said.

The monetary policy actions taken since May 2022 are still working through the system. Accordingly, the MPC decided to keep the policy rate unchanged to assess the progress made so far, while closely monitoring the evolving inflation outlook," he said. Recalling the rate hikes, Das said since May 2022, the repo rate has been hiked by 250 bps and it was preceded by the introduction of the Standing Deposit Facility (SDF) at a rate 40 bps higher than the fixed rate reverse repo.