Governor Shaktikanta Das declared on Friday that the Reserve Bank of India's Monetary Policy Committee (RBI MPC) had decided to maintain the repo rate at 6.5% for the eleventh consecutive period. According to him, the decision was made by the majority of members. December 4–6 was the committee's meeting date.
For the last nine meetings, the RBI has kept the repo rate at 6.5%, and it is probably going to do so once more. The central bank is focused on striking a balance between controlling inflation and promoting economic growth, even in the face of calls for a rate cut.
According to Das, the bank rate and the marginal standing facility (MSF) rate are still at 6.75 percent, while the standing deposit facility (SDF) rate is still at 6.25%.
With the support of the majority of members, the RBI MPC has also chosen to maintain its position of "withdrawal of accommodation." According to RBI Governor Das, this was done to stimulate growth while ensuring that inflation stayed below the four percent objective.
Slow growth and high inflation
Due to the high cost of food and geopolitical unrest that has negatively impacted global supply chains, inflation hit a 14-month high of 6.21% in October.
Furthermore, India's GDP growth in Q2 FY25 fell to 5.4%, the lowest in two years, from 8.1% in the same quarter last year. It was also much below than the RBI's own estimate of 7% for the quarter. The decline is due to poor performance in manufacturing and mining.
