RBI Maintains Repo Rate Amid Inflation Challenges

In its 50th Monetary Policy Committee meeting, the Reserve Bank of India decided to keep the repo rate unchanged at 6.5%. RBI officials discussed persistent food inflation, the need to support economic growth, and the importance of maintaining price stability to achieve the inflation target of 4%.

The Reserve Bank of India (RBI) has decided to maintain the policy repo rate at 6.5%, following its 50th Monetary Policy Committee (MPC) meeting. The meeting, held from August 6 to 8, was steered under Section 45ZB of the RBI Act, 1934.

Governor Shaktikanta Das highlighted the slow and uneven decline in inflation, stressing that while food inflation remains a significant concern, steady growth impulses allow monetary policy to focus on achieving a sustained descent in inflation. Das emphasized the importance of price stability for sustainable growth.

Deputy Governor Michael Debabrata Patra expressed concern over the widening gap between headline and food inflation, indicating that the inflation target has not yet been met. Dr. Rajiv Ranjan pointed out the resilience of the domestic economy despite increased global risks, while Professor Jayanth R. Varma and Dr. Ashima Goyal raised concerns about the restrictive nature of current monetary policy on growth.

(With inputs from agencies.)