Repo Rate unchanged for 6th Straight Time

The Reserve Bank of India (RBI) kept its key lending rate unchanged on Thursday for a sixth straight meeting, in line with expectations, as inflation stayed above the 4% medium-term target while economic growth continued to be resilient.

The six-member monetary policy committee, consisting of three RBI and three external members, left the key repo rate unchanged at 6.50% after having raised it by 250 basis points between May 2022 and February 2023.

Monetary policy must continue to be actively disinflationary, RBI Governor Shaktikanta Das said in his statement. Five out of six members voted in favour of the rate decision.

Annual retail inflation picked up to 5.69% in December from November's 5.55%, well above the 4% target. However, a sustained fall in core inflation and a fiscally prudent budget have raised expectations of a possible change in the RBI's monetary policy stance.