FX.co ★ India Keeps Key Interest Rates Unchanged

On Friday, the Reserve Bank of India (RBI) opted to maintain its key interest rates, noting a downward trend in inflation. Under the leadership of Governor Shaktikanta Das, the Monetary Policy Committee (MPC) of the RBI voted 5-1 in favor of leaving the repo rate at 6.50 percent.

In an attempt to curb inflationary pressures, the central bank has increased the key rate by 250 basis points since May 2022. A majority of committee members (5 out of 6) agreed to persist with the withdrawal of accommodation to ensure inflation gradually aligns with their target, while concurrently supporting economic growth.

Moreover, the RBI confirmed their previous forecast for real GDP growth in the 2024-25 fiscal year, which remains at 7.0 percent. Similarly, the central bank maintains its prediction for inflation in the same period, assuming a normal monsoon, at 4.5 percent.