The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) concluded its bi-monthly meeting on December 8, keeping its key interest rate unchanged for the fifth consecutive meeting, as expected. The three-day bi-monthly MPC meeting of the RBI began on Wednesday, December 6.

RBI Governor Shaktikanta Das said that the MPC has unanimously decided to keep the policy repo rate unchanged at 6.5%, citing a potential resurgence in inflation and signalling that price stability remained its primary objective.

The MPC hiked the repo rate by 250 basis points (bps) to 6.5% since May 2022 before pausing the rate increase cycle in April 2023. 

Das further added that the Standing Deposit Facility rate remains at 6.25% and the Marginal Standing Facility rate and the Bank Rate at 6.75%, as prices remain higher than the central bank’s medium-term target of 4 percent.

The headline inflation stood at 4.87% in October, within the RBI’s tolerance band of 2-6% for the second straight month. However, inflation has stayed above its medium-term target of 4% for 49 consecutive months now. The MPC is alert and prepared to take necessary actions that are needed, the governor added.

According to Shaktikanta Das, the growth projection has been raised to 7% for the current financial year from 6.5% earlier. The RBI projected the Consumer Price-based Inflation (CPI) based retail inflation at 5.4% for the current fiscal.