RBI Monetary Policy: RBI kept the repo rate unchanged at 6.5% by a 4:2 majority. (File)
New Delhi/Mumbai:
The Reserve Bank of India (RBI) has kept its key lending rate unchanged for the 11th consecutive time citing high inflation, but lowered sharply the growth target for the current financial year.
The six-member Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 6.5 per cent by a 4:2 majority, announced RBI Governor Shaktikanta Das this morning. An unchanged repo rate means the loan interest rates too are likely to remain unchanged.
The status quo on the repo rate came despite the growth rate plunging to a seven-quarter low of 5.4 per cent in the July-September quarter, ending much lower than its own projection of 7 per cent.
This came as a disappointment for investors who have been looking for a rate cut. The RBI paused the rate increase cycle in April 2023, after six straight rate hikes of 250 basis points since May 2022.
The MPC, which meets every two months, lowered the growth target for this fiscal to 6.6% from its earlier projection of 7.2 per cent.
The inflation target has been raised to 4.8 per cent from the 4.5 per cent projected previously. Inflation surged above the 6% tolerance level in October, the RBI governor said, adding that food inflation will start easing next quarter. The persistent high inflation reduces the buying power of consumers, he added.
The MPC, he said, believes that only with durable price stability can strong foundations be secured for high growth.
Mr Das said the global economy has shown unusual resilience in 2024. Supply chain pressures eased in the last two months, he said, noting that rural demand is trending upwards while urban demand shows some moderation on high base.
The RBI has also raised the interest rate ceiling on NRI deposits, aiming to strengthen the rupee. To ensure that banks have more money available for lending, the cash reserve ratio (CRR) has been slashed to 4 per cent from 4.5 per cent, which would release Rs 1.16 lakh crore to the banks and improve their lending capacity.
The RBI has also announced a new technology – themulehunter.in – which it has developed to reduce digital fraud.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
