India’s c. bank holds interest rates unchanged

The Reserve Bank of India’s (RBI) Monetary Policy Committee decided to maintain the policy repo rate at 6.50 per cent. This decision follows a thorough evaluation of the current macroeconomic conditions.

In addition to maintaining the repo rate, the MPC also decided to leave the standing deposit facility (SDF) rate at 6.25 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 per cent.

Furthermore, the MPC shifted its monetary policy stance from “withdrawal” to “neutral.” This indicates a less restrictive approach to monetary policy while remaining focused on achieving a durable alignment of inflation with the target.

The central bank’s objective is to achieve a medium-term target for consumer price index (CPI) inflation of four per cent within a band of +/- 2 per cent, while supporting growth.

Attribution: The Reserve Bank of India statement

Subediting: M. S. Salama