Monetary Policy Committee (MPC) meeting of the Reserve Bank of India (RBI) which began on February 6 culminated today with Governor Shaktikanta Das address.
In a move that was widely anticipated by analysts and investors, the RBI decided to maintain the repo rate at 6.5%.
Governor Das said, that "The protection of customers' interests is of paramount importance amidst the evolving economic landscape"
The MPC's decision comes with a focus on analyzing the current economic conditions and future outlook. Das announced the policy decision ahead of a press conference to be held at 12 pm, where he reiterated the central bank's commitment to maintaining financial stability.
Das said, "The recent moderation in inflation, witnessed a significant decrease from the peaks in 2022, This downward trend in inflation has provided some relief and room for the RBI to hold the policy rates steady"
"As per the RBI Act of 1934 and its subsequent amendments, the Reserve Bank of India is entrusted with the formulation of the country's monetary policy, aimed at achieving price stability and fostering economic growth", he added.
Addressing the issue of financial stability, Das remarked on the resilience of the domestic financial system, emphasizing the importance of healthy balance sheets for banks and financial institutions.
He stressed the need for robust risk management, sound compliance culture, and protection of customers' interests to ensure the safety and stability of the financial sector.
The Governor provided insights into the MPC's deliberations, stating, "After a detailed analysis of the macroeconomic outlook, the MPC decided by a majority to keep the policy repo rate unchanged at 6.5%. Consequently, the standing deposit facility rate remains at 6.25%, while the marginal standing facility and bank rate stood at 6.75%."
Analysts are anticipating a status quo in line with the US Federal Reserve's policy stance. "The central bank's commitment to safeguarding the interests of customers highlights its proactive approach in navigating the challenges posed by the evolving economic environment", analysts pointed.
"The Reserve Bank of India will continue to closely monitor economic indicators and global developments to ensure an appropriate policy response in the future, with a focus on promoting sustainable growth while maintaining price stability", Das affirmed.
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