New Delhi June 8 2023: India's central bank kept its key lending rate steady for a second straight policy meeting on Thursday, as widely anticipated, as it looked to assess the impact of past rate increases amid slowing inflation.
The monetary policy committee (MPC), which has three members from the Reserve Bank of India (RBI) and three external members, kept the repo rate (INREPO=ECI) steady at 6.50% in a unanimous decision.
The RBI's policy stance was maintained as "withdrawal of accommodation" to ensure inflation progressively aligns with the committee's target while remaining supportive of growth, Governor Shaktikanta Das said while announcing the MPC's decision.
"Our goal is to achieve the inflation target of 4% and keeping inflation within the comfort band of 2-6% is not enough," Das said.
The committee will act "promptly" and as required to keep inflation expectations anchored, Das said.
The Indian central bank sees growth in 2023/24 at 6.5% while retail inflation is seen averaging 5.1%, Das said.
"Domestic macroeconomic fundamentals are strengthening," he said.