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RBI decides to keep repo rate unchanged at 6.5 pc

News Agencies | Updated on: 6 April 2023, 10:59 IST
RBI Governor Shaktikanta Das

New Delhi: The Reserve Bank of India has decided to keep the key benchmark interest rate - repo rate - unchanged at 6.5 per cent with readiness to act should the situation so warrant, Governor Shaktikanta Das announced on Thursday, after a two-day monetary policy (MPC) meeting.

Five out of six members of MPC voted to remain focused on the withdrawal of accommodation to ensure inflation aligns with target while focusing on growth, RBI Governor Shaktikanta Das said on Thursday. The Monetary Policy Committee of the central bank decided to take a pause after a rate hike seen in previous six consecutive policies.

Accordingly, RBI has decided that the standing deposit facility (SDF) will remain unchanged at 6.25 per cent and the marginal standing facility (MSF) and bank rates unchanged at 6.75 per cent.

Shaktikanta Das-headed Monetary Policy Committee (MPC) conducted its three-day meeting on April 3, April 5 and April 6 amid the rate hiking spree that started in May last year to check inflation. At the last MPC meeting of the RBI in early February, it decided to raise the repo rate by 25 basis points to 6.5 per cent to manage inflation.

So far, RBI raised the repo rate, the rate at which it lends to banks, by 250 basis points cumulatively since May 2022. Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.


First published: 6 April 2023, 10:59 IST