As of June 7,2024, the RBI decided to keep the Repo rate unchanged at 6.5%. This marks the eighth time in a row the rate has been held steady.
Maintaining Focus on Inflation: The RBI prioritizes controlling inflation, especially considering recent food price increases.Even though overall inflation (4.83%) is within the RBI’s target range, they remain cautious.
Balancing Act: The decision reflects a balancing act. While inflation is a concern, strong economic growth argues for keeping rates stable.
Unexpected Election Outcome: The RBI might be considering the uncertainty caused by the recent election results when making their decision.
Food Inflation Concerns: Rising food prices, especially in urban areas, are a significant factor for the RBI.
Overall, the RBI’s decision to maintain the Repo rate suggests a wait-and-see approach. They are likely monitoring inflation closely and may adjust rates in the future depending on economic developments.
