Reserve Bank of India maintains policy interest rate at 6.5 percent

(MENAFN) The Reserve Bank of India (RBI) has maintained its policy interest rate at 6.5 percent as of Thursday, aligning with market expectations. This decision reflects the central bank's cautious approach amid ongoing economic conditions, and the move was widely anticipated by analysts and market participants.

In addition to holding the policy rate steady, the RBI also kept the standing deposit facility rate unchanged at 6.25 percent and the marginal standing facility rate at 6.75 percent. The last adjustment to the policy rate occurred in February 2023, when the central bank raised it to the current level of 6.5 percent. The RBI's decision indicates a continued focus on managing inflation while supporting economic growth.

The central bank emphasized that its decision to maintain the current rates is consistent with its goal of achieving a medium-term inflation target of 4 percent. This objective remains a key priority for the RBI as it navigates the complex dynamics of inflationary pressures and economic stability. The bank's commitment to this target underscores its strategy of balancing inflation control with the need to foster sustainable growth.

India's inflation rate rose to 5.1 percent in June 2024, following a period of stability at 4.8 percent during April and May of the same year. The RBI acknowledged that while headline inflation has moderated from its previous peak, the decline has been uneven. This uneven moderation in inflation suggests that underlying price pressures persist, prompting the central bank to adopt a cautious stance in its monetary policy decisions.

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