RBI holds repo rate for 9th time in a row at 6.5%

September 17, 2024 admin 0 Comments economic growth, food supply shocks, growth, inflation, inflation target, Monetary Policy Committee, policy rates, price stability, rbi, Repo rate, Shaktikanta Das

RBI decided to keep policy rates on hold for the ninth consecutive time, citing strong demand and the need to maintain inflation’s declining trajectory. The central bank said that there is a need to remain vigilant amid the backdrop of “large and persistent” supply side shocks in food items.

The six-member monetary policy committee voted 4:2 to keep the repo rate — the rate at which the central banks lends to banks — at 6.5% and to continue focusing on withdrawing accommodation to align inflation with the target while supporting growth.

“Growth remains resilient, inflation has been trending downward and we have made progress in achieving price stability; but we have more distance to cover.

The progress towards our goal of price stability has been uneven due to large and persistent supply side shocks, especially in food items. We need to remain vigilant to ensure that inflation moves sustainably towards the target, while supporting growth. This approach would be net positive for sustained high growth,” Das said in a statement after the meeting of the monetary policy committee.