Reserve Bank of India has kept the repo rate unchanged at 6.5%. The monetary policy committee unanimously decided to pause on the policy rates. However, RBI governor Shaktikanta Das clarified that this pause on repo rate is only for this meeting.
Pointing out that the global economy is facing a renewed phase of turbulence, the governor said that RBI will be ready to act, should the situation warrant.
With the repo rate having been hiked by a total of 250 basis points in the last 11 months (since May 2022), the governor said that it was now necessary to evaluate the cumulative impact of the rate hikes.
Explaining the reasons behind the pause, governor said that though there is improvement in global economic activity, there are additional downside risks on financial stability concerns.
On the domestic front, the RBI governor said that banks and NBFCs remain healthy and economic activity remains resilient. Pointing out that core inflation was still high, governor Das emphasised that the monetary policy remains unwaveringly focused on inflation and remains committed to price and financial stability.
GDP growth is projected at 6.5% for FY24. The inflation forecast for FY24 stands at 5.2%.