For The 4th Consecutive Time, RBI Keeps Lending Rate Unchanged At 6.5%

The Reserve Bank of India (RBI) decided to keep its key lending unchanged at 6.5% for the fourth consecutive time. RBI Governor Shaktikanta Das informed today that this significant decision was taken unanimously at the central bank”s Monetary Policy Committee (MPC) meeting after a detailed assessment of the evolving macroeconomic and financial developments and the outlook. At the previous meet in August as well, the MPC maintained status quo on repo rate. This move by RBI means that the loan interest rates too are likely to remain unchanged.

RBI Governor Shaktikanta Das said that the banking system remains resilient and the overall inflation outlook is clouded by uncertainties. RBI Governor also added that Macroeconomic stability as well as inclusive growth are the fundamental principles underlying country”s progress. RBI is also likely to consider OMO sales of government securities to manage liquidity consistent with the stance of monetary policy. Shaktikanta Das informed that the timing and quantum of such operations will depend on prevailing liquidity conditions and added that the monetary policy has to be in absolute readiness to avoid spillovers from oil shocks.

RBI Governor stated that the global economy is slowing under the impact of tight financial conditions, geopolitical tensions and increasing geoeconomic fragmentation. Shaktikanta Das also said that the central bank”s aim is to align inflation to the target on a durable basis while supporting growth. RBI also extended the Payments Infrastructure Development Fund (PIDF) Scheme for two more years. The three-day meeting of Monetary Policy Committee (MPC) started on Wednesday, October 4.