Mumbai: The Reserve Bank of India's Monetary Policy Committee kept the repo rate unchanged at 6.5 per cent on Thursday.
The rate increase cycle was paused in April after six consecutive rate hikes aggregating to 250 basis points since May 2022.
Announcing the bi-monthly monetary policy, RBI Governor Shaktikanta Das said the Monetary Policy Committee (MPC) unanimously decided to keep the rate unchanged at 6.5 per cent.
He said the MPC will remain watchful of the inflation and remains resolute to its commitment to align inflation to the targeted level.
While keeping the interest rate intact, Das said headline inflation still remains above RBI's target of 4 per cent.
The MPC meeting took place against the backdrop of consumer price-based (CPI) inflation on some food items like tomato, wheat and rice that have witnessed surge in price in the last few weeks.
The government has mandated RBI to ensure CPI inflation at 4 per cent with a margin of 2 per cent on either side.
"Indian economy is exuding enhanced strength and stability. It has made significant progress towards controlling inflation," said Das while announcing the monetary policy.
The central bank continued with the pause on the repo rate as concerns on the inflation front and keeping borrowing costs stable to maintain the economic growth momentum persist.
The borrowing cost, which started rising in May last year, has stabilised with the RBI keeping the repo rate unchanged at 6.5 per cent since February when it was raised from 6.25 per cent.
India's retail inflation based on Consumer Price Index (CPI) rose to a three-month high of 4.81 per cent in June, mainly on account of hardening prices of food. The inflation, however, remains within the RBI's comfort level of below 6 per cent. The inflation data for July will be released on August 14.
The MPC consists of three external members and three officials of the RBI. The external members of the panel are Shashanka Bhide, Ashima Goyal and Jayanth R Varma. Besides Governor Das, the other RBI officials in MPC are Rajiv Ranjan (Executive Director) and Michael Debabrata Patra (Deputy Governor).
(With PTI inputs.)
