The Reserve Bank of India (RBI) RBI Governor Shaktikanta Das-led six-member Monetary Policy Committee (MPC) on Friday voted unanimously to keep the repo rate unchanged at 4 per cent.
The rate remained unchanged for the eleventh time in a row. The reverse repo rate also remains unchanged at 3.35 per cent, Das said after the MPC meeting.
The rate-setting panel of the RBI also decided to retain the accommodative policy stance to support economic growth and recovery. It kept the reverse repo rate unchanged at 3.35 per cent.
The MPC also decided to keep the marginal standing facility (MSF) unchanged at 4.25%. It downgraded the GDP growth rate to 7.2 per cent for FY23, from the 7.8 per cent forecast in the previous meet. The inflation for the current fiscal is now pegged at 5.7 per cent, up from the 4.5 per cent projection in the February meeting.
Commenting on MPC's decision, IMF Executive Director for India, Bangladesh, Bhutan and Sri Lanka Surjit Bhalla said, "For monetary policy, the world and India have gone through a rethink. We have experienced supply shocks and responding to the monetary to our cost."
"The monetary policy around the world what I would prescribe, including the US, including India, etc. is be careful with knee-jerk, old traditional reactions and I would say this to the US. I have said this in various meetings etc," he added.
The RBI's rate-setting panel started its three-day meet on Wednesday to deliberate on firming up the next bi-monthly monetary policy.
The MPC held its first meeting in the current financial year. In the last 10 meetings, the MPC left the interest rates unchanged and also maintained an accommodative monetary policy stance.
The repo rate or the short-term lending rate was last cut on May 22, 2020. Since then, the rate remains at a historic low of 4 per cent.
The government has mandated the central bank to keep inflation at 4 per cent, with an upper and lower tolerance level of 2 per cent.
After the February MPC meeting, the RBI had decided to hold its key lending rates steady at record low levels for the 10th straight meeting to support a durable recovery of the economy.
Copyright©2023 Living Media India Limited. For reprint rights: Syndications Today