The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has decided by a 4:2 majority to keep the policy repo rate unchanged at 6.5%. Consequently, the standing deposit facility (SDF) rate remains at 6.25%, and both the marginal standing facility (MSF) rate and the bank rate hold steady at 6.75%.
The decision comes at a time when food inflation remains a persistent concern, with urban areas experiencing a 1.03% rise and rural areas a 0.59% increase in April. This led to a combined national food inflation increase of 0.74%.
Despite the inflationary pressures, retail inflation hit an 11-month low in April 2024, settling at 4.83%. This lower retail inflation rate reflects a robust growth momentum within the economy, even as specific inflationary challenges persist.
Governor Das emphasized the need to balance inflation control with fostering economic growth. “The decision to keep the repo rate unchanged reflects our commitment to maintaining stability while addressing the underlying inflationary pressures,” he said.
The MPC’s decision underscores the complex economic environment, where growth indicators are positive, but inflation, particularly in food prices, continues to pose challenges. The RBI’s stance indicates a cautious approach to monetary policy, aiming to support sustained economic growth without exacerbating inflationary pressures.