The Reserve Bank of India (RBI) on Friday kept its key lending rate unchanged at 6.5% for the seventh consecutive time. The decision was taken by a 5:1 majority at the bi-monthly Monetary Policy Committee (MPC) meeting, said RBI Governor Shaktikanta Das. An unchanged repo rate means the loan interest rates too are likely to remain unchanged.
Mr Das also said that inflation is moving closer to targets. Core inflation has declined steadily over the last nine months while the fuel component remained in deflation for six straight months, he said.
“As the uncertainties in food prices continue to pose challenges, the MPC remains vigilant to the upside risk to inflation that may derail the path of disinflation,” he said, adding that the outlook for agricultural and rural activity appears bright.
Robust growth prospects provide space for the policy to remain focussed on inflation, said the RBI Governor.
He said the global economy remained resilient and global trade is expected to grow faster in 2024.
“Services inflation remains sticky in advanced economies. Equity markets have gained while bond yields and dollar remained volatile,” said Mr Das.
He also said that India’s liquidity situation improved in March while the average borrowings under the marginal standing facility, which allows banks to borrow funds, moderated.
