Reserve Bank of India's monetary policy committee (MPC) continued its pause stance on repo rate. RBI Governor Shaktikanta Das announced after the completion of the bi-monthly policy review meet that the rate would remain unchanged at 6.5 per cent. Das said, "The MPC unanimously decided to keep the repo rate unchanged."
This comes amid the soaring food inflation in the country which the experts believe will put pressure on CPI inflation. It fell to 4.2 per cent in May this year after the highs of 2022. However, CPI inflation again heated up and reached 4.8 per cent in June. Experts expect the headline number to increase again in July due to high food inflation. In his address, Das informed that the forecast for CPI inflation has been raised to 5.4 per cent from the earlier 5.1 per cent.
Talking about the policy stance, the central bank governor said that it remains unchanged at 'withdrawal of accomodation'. He informed that five out of six members of the committeee agreed to keep the stance unchanged.
RBI had first put a pause on rate hikes in its April policy review. Unlike the Indian central bank, Federal Reserve and other major central banks across the world have continued to hike rates to tame inflation.
In his statement, Das expressed confidence in the Indian economy and said that the domestic markets have held up well. He added, " I am happy to note that the Indian economy is exuding enhanced strength and stability despite the massive shocks to global economy in recent years. Our economy has continued to grow at a reasonable pace, becoming the fifth largest economy in the world."