RBI MPC Meeting: ‘Rate hike of 250 bps points working its way,' says Governor Shaktikanta Das
RBI MPC meeting: The Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday decided to keep policy rate unchanged for third time in a row during the bi-monthly monetary policy meeting. The RBI Governor said that the cumulative rate hike of 250 bps from FY23 is working its way through the economy. The repo rate increase cycle was paused in April this year after six consecutive rate hikes aggregating to 250 basis points since May 2022.
The monetary policy committee (MPC), which has three members from the central bank and three external members, kept the repo rate unchanged at 6.50% in an unanimous decision. Further, RBI Governor Das said that India's strong macroeconomic fundamentals have held to strong growth. He said that India is contributing approx 15% to global growth.
"Banks remain healthiest with historic high levels of capital," Governor Das added. However, Das said that the RBI is prepared to act if warranted, and added, "Global growth will remain low by historical standards for the next few years". The RBI Governor said that the policy rates could stay higher for longer period in global economies but India is positioned to weather the external headwinds.
Citing FMCG and agricultural data, Das said recovery happening in rural demand. “FMCG sales pick up in rural areas reflect incipient revival of rural demand; expected to get further boost with good Kharif harvest," Governor DAs said during the RBI MPC meeting held on Thursday. Further, RBI retained growth projection at 6.5% for the current fiscal year with risks evenly balanced.
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