The Reserve Bank of India (RBI) maintained the repo rate at 6.5% for the ninth consecutive time, citing stubborn food inflation. Experts say the decision was expected, with the central bank focused on disinflation.
Photograph: Courtesy ANI
Kolkata, Aug 8 (PTI) The Reserve Bank of India's (RBI) decision to maintain the status quo on key policy rate was on expected lines, experts said on Thursday.
The apex bank decided to keep the policy rate unchanged for the ninth time in a row, saying food inflation remains stubborn.
The rate increase cycle was paused in April last year after six consecutive rate hikes, aggregating to 250 basis points since May 2022.
Announcing the third bi-monthly monetary policy for the current financial year, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) has decided to keep the repo rate unchanged at 6.5 per cent.
Bandhan Bank Chief Economist and Head of Research Siddhartha Sanyal said the status quo on the key (repo) rate is not a surprise.
The central bank was emphatic to underscore the commitment to further disinflation and is in no hurry to cut rates, he said.
While the RBI closely watches the heightened volatility in financial markets globally, it has rightly avoided a knee-jerk reaction, Sanyal said.
The decision to keep the rate at 6.5 per cent was taken with a 4-2 majority in the six-member MPC.
Equirus Securities economist Anitha Rangan said the decision to keep the rate unchanged was taken in view of the domestic inflation led by the food side.
"RBI is not going to ignore food inflation. According to the central bank, the pace of inflation is moderating but the moderation is uneven and slow. Therefore patience is required," she said.
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