Reserve Bank of India leaves repo rate intact at 6.5%

The Reserve Bank of India left its key repo rate unchanged at 6.5% for an eighth straight policy meeting in June, in line with market expectations, as price pressures persisted.

Annual CPI inflation in the country was reported at 4.85% in April, little changed compared to the March rate. It has remained within the central bank’s medium-term target range of 2%-6%.

According to RBI Governor Shaktikanta Das, uncertainties will likely continue to affect the inflation outlook amid ongoing deflation in fuel. Yet, food inflation still remains elevated.

The Monetary Policy Committee decided by a majority of 4 out of 6 votes to maintain the “withdrawal of accommodation” stance.

“RBI’s status quo on rates and stance was in line with market expectations but the split in voting patterns clearly shows the increasing probability towards a pivot in the policies ahead,” Upasna Bhardwaj, chief economist at Kotak Mahindra Bank, was quoted as saying by Reuters.

The RBI also raised its economic growth forecast for the fiscal year 2025 to 7.2% from 7% previously.

The Indian Rupee was little changed on the day against the US Dollar, with the USD/INR currency pair last trading at 83.3950.