RBI Monetary Policy: Governor Shaktikanta Das Announces Repo Rate Unchanged at 6.5%

In a closely watched decision, the Reserve Bank of India (RBI) has maintained its repo rate at 6.5% for the eighth consecutive time, reinforcing its focus on achieving the medium-term inflation target of 4%. 

The Monetary Policy Committee (MPC), which is responsible for setting the benchmark interest rates, voted to retain the repo rate and uphold its stance of 'withdrawal of accommodation.' This decision underscores the central bank’s cautious approach amidst a favourable inflation-growth balance.

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MPC Voting and Historical Context

Out of the six members of the MPC, four voted in favor of keeping the policy repurchase rate unchanged. This marks a shift from earlier meetings, where only one member had opposed the status quo. The last adjustment to the repo rate occurred in February 2023, when it was increased to 6.5%. The consistency in maintaining this rate reflects the RBI’s strategy to balance economic growth with inflation control.

Economic Growth and Inflation Projections

The MPC has revised its growth forecast for the fiscal year 2025 (FY25) to 7.2%, up from the earlier estimate of 7%. This optimistic outlook is buoyed by the robust 8.2% growth recorded in FY24, supported by a strong 7.8% growth in the January-March quarter. Governor Das emphasized the central bank’s confidence in sustaining this momentum, highlighting the balanced risks to the growth trajectory. 

The RBI has maintained its forecast on the inflation front, predicting an average retail inflation rate of 4.5% for FY25. The quarterly estimates project inflation at 4.9% in Q1, 3.8% in Q2, 4.6% in Q3, and 4.5% in Q4. Despite a slight decrease in annual retail inflation to 4.83% in April from 4.85% in March, the rate remains above the MPC’s target, signalling continued vigilance.

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Market Expectations and Reactions

Market analysts had widely anticipated the RBI’s decision to keep the repo rate unchanged, and the announcement was largely seen as a ‘non-event’ for financial markets. Consequently, the Indian stock market indices, Sensex and Nifty 50, opened flat on the day of the policy announcement. This reflects the market’s prior adjustment to the expected continuity in the central bank’s monetary stance.


The RBI’s decision to maintain the repo rate at 6.5% and its stance of ‘withdrawal of accommodation’ underscores a steady approach to managing the country’s economic recovery and inflationary pressures. With a growth outlook and balanced inflation risks, the central bank aims to navigate the complexities of the current economic environment with a focus on domestic stability and resilience.

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