RBI MPC meet: Repo rate unchanged at 6.5%, decision taken with 4:2 majority

The Reserve Bank of India (RBI) decided to keep the policy repo rate unchanged at 6.5 per cent and also maintained the withdrawal of accommodation stance to tackle inflation. The decision was taken with 4:2 majority, RBI governor Shaktikanta Das said in the post monetary policy committee (MPC) meet press conference.

"The MPC also decided to remain focused on withdrawal of accommodation to ensure anchoring of inflation expectations and fuller policy transmission," the RBI governor said at the post-MPC presser. 

Furthermore, the central bank also kept standing deposit facility (SDF) and the marginal standing facility (MSF) rates unchanged. While the SDF continues to be at 6.25 per cent, the MSF and bank rates remain at 6.75 per cent.

This is the eighth time in a row that the RBI has decided to keep the repo rate unchanged. He also stated that the central bank continues to remain committed to align inflation to the 4 per cent target on a durable basis. The central bank projected inflation to remain at 4.5 per cent in the current fiscal assuming normal monsoon with risks evenly balanced, Das said.

He added that food inflation remains elevated and can derail the path to disinflation. "While the MPC took note of the disinflation achieved so far without hurting growth, it remains vigilant to any upside risks to inflation, particularly from food inflation, which could possibly derail the path of disinflation," he said. 

Das further noted CPI headline inflation softened in March-April and that vegetable prices are seeing an uptick. He mentioned that the second quarter of current fiscal is likely to see some correction in retail inflation. 

Shaktikanta Das added that there is a need to closely monitor food inflation. The RBI MPC meet was held from June 5-7. This was the first RBI monetary policy committee meeting after the Lok Sabha Election Results 2024.