Mumbai: Amid downward trend in retail inflation and staying in its target range, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Thursday kept the repo rate unchanged at 6.5%.
Repo rate refers to the interest rate at which the RBI lends to commercial banks. A high repo rate means cost of borrowing for commercial banks going up and as a result leads to rise in loan EMIs.
The six-member rate-setting panel led by RBI Governor Shaktikanta Das took the decision on repo rate unanimously based on the prevailing economic situation and outlook.
"The MPC also decided by a majority of 5 out of 6 members to remain focussed on withdrawal of accomodation to ensure that inflation progressively align with the target while supporting growth," said RBI Governor Das.
After raising the repo rate cumulatively by 250 basis points (one basis point is equal to 0.01%) to 6.5% between May 2022 and February this year to tame rising inflation, the MPC had hit the pause button on the benchmark lending rate in April.
Showing signs of moderation, the Consumer price index (CPI) based inflation came in at an 18 month low of 4.7% in April, 2023. It is currently in the RBI's target range of 2-6%.
The MPC is tasked to keep inflation in check and maintain price stability. (with UNI inputs)
