New Delhi, August 2024.

The Reserve Bank of India-led Monetary Policy Committee on Thursday decided to keep the repurchase rate unchanged at 6.5 per cent for the ninth time in a row.

RBI governor Shaktikanta Das, while announcing the decisions of the bi-monthly meet, said that the decision was taken with a majority of 4:2 by the MPC. It also decided to retain the withdrawal of accommodation stance.

"We are seeing good amount of convergence between market expectations and RBI policies, they are well aligned," said Das.

Anu Aggarwal, Head – Corporate Banking, Kotak Mahindra Bank said, “RBI's decision to hold the repo rate at 6.5% for the ninth consecutive time was on expected lines amid persistent inflationary pressures with June inflation coming in at 5.1%, and food in particular running away at 8.4%. We need to watch out for Fed action in September when a rate cut is near certain which will set the stage for our own likely cut by December. RBI's commitment to inflation target of 4% while our GDP growth is on track I seems the right thing to do.”

The Central Bank has been looking at data and deciding on policy objectively. The food inflation and the impact of base effect on inflation doesn’t warrant a looser monetary policy. The reduction of reporting periodicity to CIC and continuous clearance of cheques are welcome steps. We believe that RBI will continue to keep the system liquidity in surplus to ease pressure on bank deposits, says Pralay Mondal, MD & CEO, CSB Bank.

Status quo on rates and policy stance was in line with our expectations. The RBI does not seem to be under any duress to act just because of global developments. Markets to be guided by development on the global policy front, domestic inflation, and monsoon progress, said Lakshmi Iyer, CEO - Investments & Strategy, Kotak Alternate Asset Managers.