The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 6.5% for the ninth consecutive time. This decision, announced during the recent monetary policy review, underscores the central bank’s cautious approach amidst ongoing economic uncertainties.
Source:- news 18
Maintaining the repo rate, the interest rate at which commercial banks borrow from the RBI, reflects the RBI’s strategy to balance inflation control and economic growth. The current rate has been in place since August 2022, and the decision to hold it steady aligns with the RBI’s ongoing commitment to ensure price stability while supporting the broader economic recovery.
Source:- BBC News
Inflation has been a critical factor influencing monetary policy decisions. Despite a moderate decline in inflationary pressures, the RBI remains vigilant against potential volatility due to global factors such as fluctuations in commodity prices and geopolitical tensions. The central bank’s priority is to anchor inflation expectations and ensure that inflation remains within the target range, which is currently set at 4% with a tolerance band of +/- 2%.
The RBI’s decision also reflects the need to support economic growth while avoiding any abrupt changes that could impact financial stability. By keeping the repo rate steady, the RBI aims to provide a stable monetary environment conducive to investment and consumption, fostering sustainable economic growth.
This prolonged period of stable repo rates indicates the RBI’s careful and measured approach to navigating the complexities of the Indian economy. The central bank’s policy stance will likely continue to evolve based on incoming economic data and global economic developments, ensuring that monetary policy remains aligned with its objectives of inflation control and economic stability.
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