RBI Monetary Policy Committee Meeting: Repo rate unchanged at 6.5%

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Follow our live RBI MPC coverage here Majority analysts had estimated that the RBI would keep its key repo rate unchanged at 6.5 percent at the conclusion of the MPC meeting, with only a few expecting a 25 basis points (bps) hike. D-Street analysts also did not expect the RBI to change its stance from ‘withdrawal of accommodation’.

However, the recent uptick in international crude oil prices are likely to keep the MPC's focus on India's inflation projections in the forthcoming quarters. At the last MPC meeting held in August 2023, the RBI voted for a pause in rate hike stayed with the 6.5 percent repo rate - which it has maintained since February.

Prior to that, the central bank had cumulatively hiked the repo rate by 250 bps starting from an off-policy meeting in May 2022 and continuing for five subsequent meetings till February 2023, over inflationary pressures led by the Russia-Ukraine war and the remainder effects of the COVID-19 pandemic. Follow our Markets coverage here The RBI's primary goal is to bring inflation down but it also would not want to damage India's economic growth.

Experts pointed out that domestic inflation spiked to 7.4 percent in July and fell back to 6.8 per cent in August and possibly will move towards 5.5 percent by December. However, it remains well above the 4 percent target and will likely remain so for at least a few more quarters."Exciting news! Mint is now on WhatsApp Channels