RBI Holds Key Interest Rate Steady for Ninth Time

• 08 Aug 2024

On 8th August, 2024, the Reserve Bank of India (RBI) decided to keep the repo rate unchanged at 6.5% for the ninth consecutive time, as announced by Governor Shaktikanta Das.

• The decision to hold the repo rate steady was made by the six-member Monetary Policy Committee (MPC) after a three-day meeting, with the vote being 4:2 in favor of no change.
• The RBI last altered the repo rate in February 2023, and this current decision reflects a continued focus on inflation control.
• RBI Governor stated that inflation is on a declining trajectory, which aligns with the RBI’s goal of reaching a 4% inflation target.
• The global economic outlook is characterized by steady but uneven expansion, according to the RBI governor.
• The RBI has maintained its policy stance to ensure inflation is firmly under control before considering rate changes.
• Despite some expected slowdown from the 8.2% GDP growth in fiscal 2024, India is projected to remain one of the fastest-growing economies, with an expected growth rate of 7.2%.
• The stock market showed a bearish trend ahead of the policy announcement, with the Sensex declining by 0.32% and the Nifty falling by 0.34%.