RBI stays on disinflationary track, keeps Repo rate intact at 6.50%

In a continued thrust on disinflationary monetary policy, the Reserve Bank of India on Friday kept key policy rates unchanged with Repo at 6.50 per cent, the standing deposit facility (SDF) rate at the same 6.25 per cent and the marginal standing facility (MSF) rate and the bank rate at 6.75 per cent. The status quo is seen to be aligned with the intention of the Monetary Policy Committee for an ecosystem of sustainable growth which, while being robust, can brave global headwinds.

- NIVEDITA MUKHERJEE

The move follows a detailed assessment of the evolving macroeconomic and financial developments and the outlook by the MPC at its meeting on Friday. “The MPC decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50 per cent. The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth,” the RBI said in its statement.

Economic activity exhibited buoyancy in Q2 aided by strong domestic demand as GDP posted a robust growth of 7.6 per cent driven by investment and government consumption. Since the last policy, CPI headline inflation moderated to 4.9 per cent in October from 7.4 per cent in July, a trend visible in all components of CPI – food, fuel and core (CPI excluding food and fuel).