The Reserve Bank of India today decided to keep the policy repo rate unchanged at 6.50 percent for the eighth time in a row. Consequently, the standing deposit facility (SDF) rate remains at 6.25 percent and the marginal standing facility (MSF) rate and the Bank Rate at 6.75 percent. The decisions were taken by a 4 to 2 majority. The MPC also decided by a majority of 4 out of 6 members to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns with the target, while supporting growth. The Monetary Policy Committee (MPC) met on 5th, 6th and 7th June.

 

While announcing the rationale of the decisions, the RBI Governor Shaktikanta Das said that the inflation-growth balance is moving favourably. He added that monetary policy must continue to remain disinflationary and be resolute in its commitment to aligning inflation to the target of 4.0 per cent on a durable basis. The government has mandated the RBI to ensure CPI inflation at 4 per cent with a margin of 2 per cent on either side. Mr. Das stated the MPC will remain watchful of elevated food inflation amid the expectation of a normal monsoon. The RBI raised the growth projection to 7.2% from an earlier estimate of 7% for the current financial year.