RBI keeps repo rate unchanged at 6.50% for seventh consecutive time

The Reserve Bank of India’s Monetary Policy Committee on Friday decided to keep the repo rate unchanged at 6.50% for the seventh consecutive time.

The repo rate is the interest rate at which the central bank lends money to commercial banks. The Monetary Policy Committee decides on changes to it every two months.

The increase in repo rates was paused in April after six consecutive hikes aggregating to 250 basis points since May 2022. A basis point is one-hundredth of a percentage point. Basis points are used to describe the percentage change in the value of a financial instrument.

On Friday, Reserve Bank of India Governor Shaktikanta Das, while announcing the first bi-monthly monetary policy for the current financial year, said that five members of the six-member committee had voted in favour of the decision to retain the repo rate at 6.5%.

“The MPC [Monetary Policy Committee] also decided by a majority of five out of six members to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth,” he said.

The governor said the committee had projected the real gross domestic product, or GDP, growth for the financial year 2024-’25 at 7%.

He said the committee would remain vigilant of upside risks to food...

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