India’s c. bank keeps repo rate unchanged

The Reserve Bank of India kept the policy repo rate unchanged at 6.50 per cent, as widely expected, amid a backdrop of easing domestic inflation and economic resilience, a statement by the Monetary Policy Committee (MPC) said on Thursday.

The MPC said it would carefully monitor any signs of generalisation of food price pressures which can fritter away the gains in easing of core inflation.

Headline inflation moderated to an average of 5.5 per cent during April-December 2023 from 6.7 per cent during 2022-23. Food price inflation continued to impart considerable volatility to the inflation trajectory, the statement added.

The statement added that MPC must continue to be actively disinflationary to align inflation to the target of four per cent on a durable basis. The MPC will remain resolute in this commitment.

The Indian economy is projected to grow by 7.3 per cent in the year ending March 31, 2024, and the central bank expects growth of seven per cent in 2024-25, aligning with the federal government’s forecast.