RBI holds repo rate at 6.5%, lowers growth forecast to 6.6%
PTC Web Desk: The Reserve Bank of India (RBI) on Friday kept its key lending rate unchanged at 6.5% for the 11th consecutive time, citing persistent inflation concerns. The decision by the six-member Monetary Policy Committee (MPC) was taken by a 4:2 majority.
Announcing the policy, RBI Governor Shaktikanta Das said the central bank has revised the growth forecast for the current fiscal year to 6.6%, down from the earlier estimate of 7.3%, following slower-than-expected GDP growth of 5.4% in the July-September quarter.
Inflation remained above the RBI’s tolerance level of 6% in October, with food prices exerting significant pressure. The central bank, however, expects inflation to moderate by the January-March quarter.
The RBI had paused its rate hike cycle in April 2023 after raising rates by 250 basis points in six successive moves starting May 2022. Investors hoping for a rate cut amid a sharp economic slowdown were left disappointed by Friday's decision.
Das noted that global economic resilience in 2024 remains a key factor but stressed that sustainable price stability is essential to achieving strong economic growth.
- With inputs from agencies
