RBI Holds Steady on Interest Rates Amid Persistent Food Inflation

The Reserve Bank of India has maintained the benchmark interest rate at 6.50% for the ninth consecutive policy meeting, citing persistent high food inflation. RBI Governor Shaktikanta Das emphasized the need for vigilance to prevent spillover effects. The RBI expects India's GDP growth to remain robust at 7.2% for fiscal 2024-25.

The Reserve Bank of India has opted to keep the benchmark interest rate and stance unchanged for the ninth consecutive policy meeting, attributing this decision to the enduring high food inflation.

The Monetary Policy Committee (MPC), which includes three RBI and three external members, voted to keep the benchmark repurchase or repo rate unchanged at 6.50 per cent. The panel's decision comes as its four-year term nears its end, with a focus on steering inflation towards a 4 per cent target.

RBI Governor Shaktikanta Das reiterated the importance of price stability, stating that the central bank must remain vigilant to prevent spillover effects from ongoing high food inflation. Das also highlighted the growth prospects of India, while cautioning against potential structural liquidity issues in the banking system due to increased reliance on alternate investment avenues.

(With inputs from agencies.)