India’s central bank, the Reserve Bank of India (RBI), on Friday kept the key policy repo rate unchanged at 6.5 percent.
This was the fourth time when the RBI kept the repo rate steady.
Addressing media persons in financial capital Mumbai, RBI Governor Shaktikanta Das said, “After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, RBI’s Monetary Policy Committee (MPC) decided unanimously to keep the Policy Repo Rate unchanged at 6.5 percent.”
The announcement came after the RBI’s six-member MPC held a meeting on Oct. 4-6.
The RBI governor stated that the retail inflation was projected at 5.4 percent for the financial year 2023-24 through next March.
“Headline inflation had surged in July driven by tomatoes and other vegetables’ prices. It corrected partly in August and is expected to see further easing in September on the back of moderation of these prices,” Das added.
He emphasized that the fight against inflation was not over yet, and that the RBI was targeting inflation at 4 percent and not between 2-6 percent.
“I would like to emphatically reiterate that our inflation target is 4 percent and not 2-6 percent. Our aim is to align inflation to the target on a durable basis while supporting growth,” he said.
He further said that in contrast with the global trends, India’s economic activity had exhibited “resilience” on the back of a strong demand.
“The momentum in agricultural activity in the second quarter of this financial year, i.e. 2023-24, has been sustained,” the RBI governor added.