Ahead of the policy meet, most economists and analysts had predicted the RBI would maintain status quo on rates. After the conclusion of the meeting of the six-member monetary policy committee (MPC), RBI governor Shaktikanta Das said that the panel had unanimously decided to leave repo rate at 6.5%, standing deposit facility rate at 6.25% and the marginal standing facility (MSF) and the bank rates at 6.75%. Repo and MSF rates are the interest rates at which banks borrow from the RBI, while bank and SDF rates are the interest rates that RBI pays when banks park their excess funds with it.

The last time the central bank had raised interest rates was on February 8 this year. Beginning April 2022, RBI has raised repo rate by 250 basis points (100 basis points equals 1 percentage point).
The economy and the banking system was yet to feel the full impact of the 250 basis points increase in the policy repo rate, and hence the MPC decided to remain focused on “withdrawal of accommodation,” the RBI governor said. Withdrawal of accommodation means the easy money policy that the RBI had adopted during the Covid years that included providing substantial money to the economy to keep it running smoothly.
The MPC remains highly alert and prepared to undertake timely policy measures, as may be necessary, to align inflation rate to RBI’s target of 4% and also anchor inflation expectations of the people, Das said.
The RBI chief also said that India was poised to become the new growth engine of the world. “In contrast to global trends, domestic economic activity exhibits resilience on the back of strong domestic demand.”