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

For the third time in a row, the Reserve Bank of India Monetary Policy Committee has kept the repo rate unchanged at 6.5% and the withdrawal of accomodation stance has been maintained.

During the credit policy announcement, RBI governor Shaktikanta Das cautioned on the need to remain vigilent towards inflation. He also said the MPC is prepared to act, should the situation warrant.

On the inflation front, the Governor announced that the CPI forecast for 2023-24 has been revised higher to 5.4% from 5.1% that was projected earlier. The governor pointed out that while core inflation has softened from its recent peaks, headline inflation is expected to surge in the short term due to the spike in prices of tomatoes, cereals and pulses.

Meanwhile, Economists have also anticipated a significant surge in retail inflation for the month of July due to soaring food prices, estimating it to reach 6.7%.

RBI's GDP growth projection has been kept unchanged at 6.5% for 2023-24.

Since May 2022, the central bank has raised the repo rate by 250 basis points.