New Delhi, Oct 9: The Reserve Bank of India (RBI) on Wednesday decided to keep the policy repo rate unchanged at 6.5% for the tenth consecutive time after its latest Monetary Policy Committee (MPC) meeting. RBI Governor Shaktikanta Das announced the decision, which received support from five out of six MPC members, reflecting a cautious approach in light of ongoing economic challenges.
In addition to the repo rate, the RBI has maintained other key rates: the standing deposit facility (SDF) rate at 6.25%, and both the marginal standing facility (MSF) rate and the bank rate at 6.75%. This move signifies the central bank’s strategy to promote economic stability while addressing inflation concerns.
Das highlighted a key shift in the RBI’s monetary policy approach, transitioning from ‘withdrawal of accommodation’ to a ‘neutral’ stance. He remarked, “The MPC has decided to change the stance of monetary policy to neutral while remaining unambiguously focused on a durable alignment of inflation with the target, alongside supporting growth.” This neutral position provides the RBI with more flexibility to adjust its policies in response to evolving economic conditions.
Although inflation has eased to 3.65% in August, according to the All India Consumer Price Index (CPI), food inflation remains high at 5.65%, exceeding the medium-term target of 4%. The RBI is closely monitoring inflationary risks, particularly those stemming from rising global crude oil prices and uncertainties in international markets.
Governor Das acknowledged that geopolitical tensions in West Asia are contributing to increased global oil prices, complicating the inflation outlook. The RBI aims to balance its strategy, flexibly addressing both inflation trends and growth objectives in the coming months.
