RBI Monetary Policy Committee meeting: policy rate unchanged at 6.5% for 11th time in a row

Fri Dec 06 04:47:48 UTC 2024: ## RBI Holds Interest Rates Steady Amidst Economic Slowdown

**Mumbai, India** – The Reserve Bank of India (RBI) maintained its key policy repo rate at 6.5% for the eleventh consecutive time on Friday, December 6th, 2024. This decision, announced by Governor Shaktikanta Das, follows a Monetary Policy Committee (MPC) meeting. While the MPC acknowledged a recent slowdown in economic growth, revising its growth forecast downwards, it cited resilience in the second half of the year and into 2025.

The MPC’s decision to hold rates reflects a balancing act between managing inflation and supporting economic growth. While acknowledging that the “last mile of disinflation” is proving challenging, the MPC noted that India’s economy remains on a “sustained and balanced path.” Food inflation, a key concern, is expected to linger into the third quarter (October-December) before easing.

The MPC cited a significant drop in real GDP growth in the second quarter (5.4%), primarily due to a slump in industrial growth, particularly in manufacturing sectors like petroleum, iron and steel, and cement. However, high-frequency indicators suggest a recovery aided by festive spending and rural activity.

Despite the slowdown, the MPC projects Consumer Price Inflation (CPI) for 2024-25 at 4.8%, with a higher 5.7% expected in the third quarter. The MPC emphasized its commitment to achieving durable price stability, a prerequisite for sustained growth. Global economic uncertainties, including rising protectionism, were also highlighted as potential risks. The central bank remains cautiously optimistic, projecting inflation to fall to 4% in the following year.