Mumbai, February 8, 2024 - The Reserve Bank of India (RBI) maintained its key lending rate, the repo rate, at 6.50% for the sixth consecutive meeting on Thursday, as anticipated. This decision comes amidst ongoing concerns about inflation exceeding the central bank's 4% target, while economic growth remains positive.
The six-member Monetary Policy Committee (MPC), led by RBI Governor Shaktikanta Das, opted to hold the line after raising the repo rate by a cumulative 250 basis points between May 2022 and February 2023. Governor Das emphasized the need for "active disinflation" in his statement, suggesting the MPC's commitment to reining in inflation without derailing economic momentum.
"The decision to maintain the status quo reflects the MPC's delicate balancing act," said economic analyst Priya Kumar. "On the one hand, inflation persists above the target, necessitating further tightening. On the other hand, aggressive rate hikes could dampen economic activity, especially considering the global slowdown."
While the pause in rate hikes provides some relief to borrowers, Governor Das hinted at the possibility of future adjustments based on evolving data. "The MPC remains watchful of evolving domestic and global developments and will continue to calibrate its monetary policy stance as needed to ensure price stability and foster sustainable economic growth," he stated.