RBI Sticks To 6.5% Key Lending Rate For 8th Consecutive Time, Fighting Inflation Remains Focus

RBI Monetary Policy June 2024: Governor Shaktikanta Das said that four out of the six MPC members voted to keep the repo rate unchanged.

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New Delhi: The Monetary Policy Committee (MPC), chaired by Governor Shaktikanta Das has been convening in Mumbai this week to discuss key policy decisions in a challenging economic landscape. RBI Governor announced that the MPC has decided to keep the policy repo rate steady at 6.5 per cent. The MPC last changed the rates in February 2023. The Reserve Bank of India has kept the key lending rate unchanged for the eighth time in a row, allowing room to focus on reducing inflation while the economy continues to grow robustly.

"The world has gone through one crisis after another in recent years, but the Indian economy exhibits strong fundamentals. We need to remain vigilant in an uncertain global environment," RBI Governor Shaktikanta Das said during a press conference.

The RBI has updated its growth forecast for the current financial year 2024-25 predicting a GDP growth rate of 7.2 per cent. The quarterly growth projections are 7.3 per cent for Q1, 7.2 per cent for Q2, 7.3 per cent for Q3, and 7.2 per cent for Q4. Governor Das emphasised that the risks to the growth outlook are evenly balanced. The standing deposit facility (SDF) rate remains at 6.25 per cent, while the marginal standing facility (MSF) rate and the bank rate stay at 6.75 per cent.

"Monetary policy must continue to remain disinflationary and be resolute in its commitment to aligning inflation to the target of 4 per cent on a durable basis sustain price stability outset strong foundation," said the RBI Governor.

The central bank’s stance on the benchmark interest has drawn significant attention. This was especially due to ongoing inflation particularly in the food sector. The RBI's repo rate, which is held at 6.5 per cent since the last increase is expected to remain unchanged for the eighth consecutive bi-monthly policy review. Mr. Das said that four out of the six MPC members voted to keep the repo rate unchanged.