RBI MPC shifts gear to ‘neutral’ while retaining repo rate at 6.5%
The Reserve Bank of India (RBI) has announced that it will maintain its key interest rate at 6.5% for the tenth consecutive meeting. RBI Governor Shaktikanta Das confirmed this decision during a press briefing following the Monetary Policy Committee (MPC) meeting.
The six-member MPC, chaired by Das, made the decision after a three-day review that commenced on October 7. Notably, three new external members have been appointed to the committee: Professor Ram Singh from the Delhi School of Economics, economist Saugata Bhattacharya, and Dr. Nagesh Kumar, Director of the Institute for Studies in Industrial Development. They replace outgoing members Ashima Goyal, Shashanka Bhide, and Jayanth R Varma.
In his statement, Das acknowledged that while inflation is on a downward trajectory, “there is still a distance to cover.” The committee, which includes three RBI members and three external experts, voted 5-1 in favor of keeping the repo rate unchanged. The last adjustment to the rate occurred in February 2023.
Additionally, the MPC maintained its growth projection at 7.2% for the current financial year, indicating a cautious but steady approach to balancing inflation control with economic growth. The decision underscores the RBI’s commitment to fostering stability in the financial sector while navigating ongoing economic challenges.
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