Fri Dec 06 05:59:00 UTC 2024: ## RBI Holds Key Interest Rate Steady Amidst Inflation Concerns, Cuts Growth Forecast

**Mumbai, India** – The Reserve Bank of India (RBI) today announced it will keep its key lending rate, the repo rate, unchanged at 6.5 percent for the eleventh consecutive time. This decision, made by a 4:2 majority of the Monetary Policy Committee (MPC), comes despite India’s economic growth slowing to a seven-quarter low of 5.4 percent in the July-September period. The RBI had previously projected 7 percent growth for the quarter.

While investors had hoped for a rate cut, the RBI cited persistent high inflation as the primary reason for maintaining the status quo. The MPC raised its inflation projection for the fiscal year to 4.8 percent, up from the previous forecast of 4.5 percent. October’s inflation rate exceeded the RBI’s 6 percent tolerance level. Governor Shaktikanta Das stated that food inflation is expected to ease in the next quarter.

The MPC lowered its growth forecast for the current fiscal year to 6.6 percent, down from the earlier projection of 7.2 percent. The RBI emphasized its commitment to price stability as a foundation for strong economic growth.

In other announcements, the RBI increased the interest rate ceiling on Non-Resident Indian (NRI) deposits to bolster the rupee. To boost bank lending capacity, the cash reserve ratio (CRR) was reduced from 4.5 percent to 4 percent, injecting ₹1.16 lakh crore (approximately $14 billion USD) into the banking system. The central bank also unveiled a new technology, themulehunter.in, aimed at combating digital fraud. Governor Das noted the global economy’s resilience and a recent easing of supply chain pressures. He also highlighted an upward trend in rural demand, contrasting with some moderation in urban demand.

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