Reserve Bank of India Holds Repo Rate at 6.50% for Seventh Consecutive Meeting

The Reserve Bank of India held its benchmark repo rate at 6.50% at the conclusion of the April 2024 Monetary Policy Committee meeting, extending an unbroken pause that has now stretched across seven consecutive decisions. The MPC also retained its policy stance at 'withdrawal of accommodation'.

Headline consumer price inflation eased to 5.1% in January–February 2024 from 5.7% in December, according to the RBI's policy resolution. That reading is within the central bank's 2-6% tolerance band and above the 4% target.

FOOD PRICE PRESSURES

The MPC noted that food price pressures were interrupting the disinflation process.

GROWTH BACKDROP AND NEXT POLICY STEPS

The MPC has framed the current configuration of rates and stance as consistent with supporting non-inflationary, sustainable growth over the medium term.

The RBI has said it remains focused on aligning inflation with the 4% target on a durable basis. Key variables under scrutiny include the trajectory of food prices, which have been a volatile component of the CPI basket, international crude oil prices, and cost-push pressures on firms, which the RBI said were showing an upward bias.