Reserve Bank keeps interest rate unchanged for ninth time in a row

Retains growth and inflation projections for current fiscal at 7.2% and 4.5%

In a move that is unlikely to alter interest rates on home, auto, and other loans, the Reserve Bank of India (RBI) on Thursday expectedly kept the benchmark repo rate unchanged at 6.50 per cent for the ninth straight policy meeting.

The RBI’s Monetary Policy Committee (MPC) also retained its “withdrawal of accommodation” policy stance to maintain its relentless focus on bringing down stubbornly high inflation.

Noting that inflation climbed to 5.08 per cent in June, RBI Governor Shaktikanta Das said that the Central bank “cannot afford to look through persisting high food inflation” and that “without price stability, high growth cannot be sustained.”

“In an environment of persisting high food inflation, as we are experiencing now, the MPC cannot afford to do so. It has to remain vigilant to prevent spillovers or second-round effects from persistent food inflation and preserve the gains made so far in monetary policy credibility,” he stated.