RBI Governor On Volatile Food Prices, Strong Growth, Tariff Impact

The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) held key lending rates steady at 5.5% on Wednesday,led by Governor Sanjay Malhotra. “The Monetary Policy Committee, MPC, met on the 4th, 5th and 6th of August to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the MPC voted unanimously to keep the policy repo rate under the Liquidity Adjustment Facility Lab unchanged at 5.5%. Consequently, the Standing Deposit Facility rate shall remain unchanged at 5.25%. And the Marginal Standing Facility rate and the Bank rate at 5.75%. The MPC also decided to continue with a neutral stance," said RBI Governor Sanjay Malhotra. The MPC noted that while headline inflation is much lower than projected earlier, it is mainly due to volatile food prices, especially in vegetables. Core inflation, on the other hand, has remained steady around the 4% mark as anticipated. Inflation is projected to go up from the last quarter of this financial year.