Reserve Bank of India leaves interest rates unchanged at 6.5%

August 10, 2023 (MLN): The Reserve Bank of India held its benchmark policy repo at 6.5% for the third consecutive meeting in August 2023, the latest data issued by the Reserve Bank of India showed.

This came in line with the market expectations wherein the market consensus was that of a rate pause.

Policymakers said that the decision remains to align inflation to the RBI’s target of 4%.

India's annual inflation accelerated for the first time in five months to 4.81% in June as compared to May’s 4.31%.

Accordingly, RBI also left both the standing deposit facility (SDF) rate and the marginal standing facility (MSF) at 6.25% and 6.75%, respectively.

To note, since May 2022, the board has increased rates by a total of 250bps, taking the lending rates to the highest level since January 2019.

The central bank also kept its growth projection for the fiscal year 2024 at 6.5% but revised its inflation projection upward to 5.4% from 5.1%.

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