Wed Oct 09 05:42:20 UTC 2024: ## RBI Maintains Repo Rate at 6.5% for 10th Consecutive Time, Changes Stance to ‘Neutral’
**New Delhi:** The Reserve Bank of India (RBI) has kept the repo rate unchanged at 6.5% for the tenth consecutive time. However, the central bank has shifted its stance from ‘withdrawal of accommodation’ to ‘neutral’. This decision was announced by RBI Governor Shaktikanta Das on October 8, 2023, after a three-day meeting of the Monetary Policy Committee (MPC).
The repo rate is the interest rate at which the RBI lends money to commercial banks. An increase in the repo rate makes borrowing from the RBI more expensive for banks. This decision comes after the US Federal Reserve cut its benchmark rate by 50 basis points.
The RBI has maintained the repo rate at 6.5% since February 2023. The government has mandated the RBI to ensure that retail inflation, measured by the Consumer Price Index (CPI), remains at 4% with a tolerance band of 2%. The current policy decision aims to keep inflation within the target range while supporting growth.
Five out of the six members of the MPC voted to keep the policy rate unchanged. The decision was supported by the expectation of retail inflation remaining at 4.5%. However, the RBI governor cautioned that the softening of inflation is expected to be gradual and uneven.
The central bank has also maintained its GDP growth forecast for the current fiscal year at 7.2%. The forecast is based on the resilience of the Indian economy despite global challenges. The projected GDP growth is expected to be 7.0% in the second quarter, 7.4% in the third and fourth quarters, and 7.3% in the first quarter of fiscal year 2026.
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