RBI MPC Meeting: Repo rate unchanged at 6.5%, ‘withdrawal of accommodation’ stance

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RBI Monetary Policy (MPC) Meet: The Reserve Bank of India's MPC has kept repo rates unchanged at 6.5 percent, RBI Governor Shaktikanta Das announced on December 8. “The RBI MPC has decided unanimously to keep the policy repo rate unchanged at 6.50 percent. Consequently, the standing deposit facility (SDF) rate remains at 6.25 percent, and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 percent," Das said.

“The MPC also decided by a majority of 5 out of 6 members to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth," he added. Real GDP growth is projected at 7 percent for the current year, FY23-24. CPI inflation is projected at 5.4 percent for FY24.

Track our LIVE coverage of the RBI Monetary Policy here Experts had anticipated that the central bank would likely keep the short-term interest rate unchanged in its upcoming MPC review this week. This expectation stemmed from India's inflation remaining within a comfortable range and the economy showing accelerated growth. The RBI has maintained the benchmark policy rate (repo) at the same level for the past four bi-monthly monetary policies.

The last adjustment to the repo rate was an increase in February 2023, setting it at 6.5 percent. This adjustment concluded a series of interest rate hikes initiated in May 2022 due to the repercussions of the Russia-Ukraine war and subsequent disruptions in the global supply chain, which led to elevated inflation within the country. India continues to hold its position as the world's fastest-growing major economy.