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Reserve Bank of India Keeps Repo Rate Steady at 6.5% Amidst Inflation Concerns

In today’s scheduled meeting on October 6, the Reserve Bank of India (RBI) opted to maintain the repo rate at 6.5%, marking the fourth consecutive meeting where the central bank has retained the policy interest rate at the same level. This decision aligns with market expectations and comes as investors closely monitor the RBI’s liquidity management strategies in the face of resurging inflation figures.

Governor Shaktikanta Das, leading the RBI, announced the policy outcome, stating, “Having made a detailed assessment of financial and macroeconomic developments, the Monetary Policy Committee of the RBI unanimously decided to maintain the policy rate at 6.5%.”

The RBI’s decision to keep the repo rate steady reflects the central bank’s stance on stabilizing the economy amidst inflationary pressures. Inflation in the retail sector is projected to reach 5.4% during the fiscal year 2023-2024. In the second quarter, inflation is anticipated to stand at 6.4%, followed by 5.6% in the third quarter and 5.2% in the fourth quarter.

The central bank’s decision to maintain interest rates at their current level underscores the careful balance it seeks to strike between supporting economic growth and addressing inflationary concerns. By keeping the policy rate steady, the RBI aims to provide a sense of stability and predictability in its monetary policy, even as it navigates the complex dynamics of India’s evolving economic landscape.

As the RBI continues to monitor key economic indicators and inflation trends, its policies will play a crucial role in shaping the trajectory of the Indian economy in the months ahead. Stakeholders and financial markets will closely follow developments to assess the central bank’s strategies and their impact on India’s economic outlook.

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