RBI keeps key lending rates unchanged at 6.5% for fourth time in a row

Maintaining a tight vigil on inflation, the Reserve Bank of India on Friday (October 6) decided to keep the key lending rate unchanged at 6.5 per cent for the fourth time in a row.

It was an unanimous decision to keep the repo rate unchanged at 6.5 per cent, said RBI governor Shaktikanta Das, while announcing the bi-monthly policy on Friday. The rate increase cycle was paused in April after six consecutive rate hikes aggregating to 250 basis points since May 2022.

Further, the RBI governor said the MPC will remain watchful of the inflation and remains resolute in its commitment to align inflation to the targeted level. According to him, the growth projection has been retained at 6.5 per cent for the current financial year with risks evenly balanced.

The MPC meeting took place against the backdrop of Consumer Price-based Inflation (CPI) touching 6.83 per cent in August. The September print of inflation is expected next week.

The government has mandated the RBI to keep CPI inflation at 4 per cent with a margin of 2 per cent on either side.

Earlier, Das said that macroeconomic stability and inclusive growth are the fundamental principles underlying our country's progress. The policy mix that we have pursued during recent years of multiple and unparalleled shocks has fostered macroeconomic & financial stability...The twin balance sheet stress that was encountered a decade ago has now been replaced by a twin balance sheet advantage with healthier balance sheets of both banks and corporates.

(With agency inputs)