The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) has decided to keep the policy repo rate steady at 6.5% during its latest review. The decision, was taken by a 4-2 majority. It reflects the central bank’s continued emphasis on managing inflation within acceptable limits.
As per the announcement by RBI Governor Shaktikanta Das, the Standing Deposit Facility (SDF) rate will remain at 6.25%. At the same time, the Marginal Standing Facility (MSF) and the bank rate will stay at 6.75%.
Balancing Growth and Inflation
The RBI Governor acknowledged the slowdown in economic growth during the second quarter. Also highlighted the growth outlook remains easy to recover. The MPC, however, remains more focused on controlling inflation, which crossed the 6% threshold in October.
This surge was caused by rising food prices, posing challenges for the economy. “The MPC is unambiguously focused on ensuring inflation aligns with its target on a durable basis,” Das emphasized, signaling the priority of price stability over aggressive growth measures.
Relief in Food Inflation
Encouraging signs lie ahead, as the MPC predicts that food inflation, a significant contributor to the recent surge, may ease by the fourth quarter of the current fiscal year. This anticipated relief is likely to support overall inflation management.
