RBI holds key lending rate steady at 6.5%
PTC News Desk: The Reserve Bank of India (RBI) has opted to keep its crucial lending rate unchanged at 6.5% for the seventh consecutive time, signaling a stable stance in monetary policy. This decision was reached by a 5:1 majority at the central bank's bi-monthly Monetary Policy Committee (MPC) meeting, as stated by RBI Governor Shaktikanta Das.
In practical terms, this decision implies that loan interest rates are likely to remain unchanged as well. Governor Das remarked on the inflation trajectory, noting that it is approaching the targets set by the central bank. However, he highlighted challenges in achieving the final stretch of this goal.
In his address, Governor Das also drew attention to the volatility observed in equity markets and bond yields, along with fluctuations in the value of the US dollar. He underscored the latent risk posed by high public debt, cautioning that such a situation could potentially escalate into a significant concern. Additionally, he warned about the repercussions of deteriorating debt levels in advanced economies, which could spill over and affect emerging market economies (EMEs), particularly those grappling with escalating public debt.
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Despite these challenges, Governor Das expressed optimism about the resilience of the global economy. He highlighted expectations for accelerated growth in global trade throughout 2024.
Moreover, Governor Das emphasised the persistence of services inflation in advanced economies, signaling a need for continued vigilance in monitoring economic indicators. Overall, while global economic conditions present a mix of opportunities and challenges, the RBI's decision to maintain the key lending rate unchanged reflects a measured approach aimed at fostering stability in India's monetary policy framework.
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(Inputs from agencies)
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