RBI Keeps Repo Rate Unchanged at 6.5% for 6th Time; Inflation Forecast Steady at 5.4% for FY24


February 8, 2023

New Delhi, India

RBI Holds Steady on Repo Rate Amidst Economic Stability

The Reserve Bank of India (RBI) has announced its decision to keep the repo rate unchanged at 6.5% for the sixth successive time. The move comes as the central bank continues its efforts to balance economic growth with inflation control.

Steady GDP and Inflation Projections

In its latest monetary policy review, the RBI has maintained its GDP growth forecast for the fiscal year 2023-24 at 7%, reflecting confidence in the country’s economic momentum. Additionally, the inflation forecast remains unchanged at 5.4%, signaling the RBI’s commitment to price stability.

Policy Stance and Interest Rates

The RBI’s policy stance continues to prioritize the ‘withdrawal of accommodation,’ indicating a cautious approach to monetary policy normalization. Key interest rates such as the Marginal Standing Facility (MSF) and the Bank Rate have also been held steady, in line with the central bank’s objective of maintaining financial system stability.

Governor’s Assurance and Future Outlook

RBI Governor Shaktikanta Das affirmed the effectiveness of the central bank’s policies in managing inflation and ensuring the stability of the financial system. Despite global uncertainties, including geopolitical tensions, the RBI remains committed to an actively disinflationary monetary policy.

Looking Ahead

With inflation projected to remain within the RBI’s target range of 4-6% for the fiscal year 2023-24, and GDP growth expected to sustain its momentum, the central bank’s decision to maintain the status quo on key policy rates reflects a balanced approach to supporting economic recovery while safeguarding against inflationary pressures.

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