RBI Monetary Policy 2023: Repo rate left unchanged at 6.5%

The Reserve Bank of India monetary policy committee (MPC) has once again left the repo rate unchanged at 6.5%, in line with what economists were expecting.

The RBI governor in his policy announcement said that withdrawal of accommodation stance has been maintained and further monetary action will be taken promptly as required.

The governor pointed out that incoming data suggests risks to near-term inflation have moderated but pressures remain, that could surface during the second half of the year.

FY24 inflation is projected to be at 5.1%, slightly lower than the earlier projection of 5.2%. GDP growth is projected at 6.5% for the current financial year.

In April, when repo rates were left unchanged, RBI governor underscored that the hold on rates was not indicative of future action, saying “It was a pause, not a pivot”. Since May 2022, the repo rate has been raised by a total of 250 basis points to bring inflation under control.