The Indian Central Bank keeps its key rate unchanged

The Central Bank of India (RBI) on Thursday kept its key rate unchanged for the sixth time in a row, as the world’s fifth-largest economy experiences high inflation and economic growth.

The reference repo rate, which is the rate granted to commercial banks, remained unchanged at 6.50%.

It increased by 2.5 percentage points between May 2022 and February 2023, but has remained stable since.

Indian economic activity, which is expected to grow by 7.3% during the financial year ending at the end of March, has performed remarkably well, said Central Bank Governor Shaktikanta Das.

He underlined the Central Bank’s desire to pursue an actively disinflationary monetary policy.

The increase in retail prices reached 5.69% year-on-year in December 2023, up compared to that of November which reached 5.55% and well above the Central Bank’s 4% target.

Core inflation, excluding food and fuel costs, was 3.8% year-on-year in December.

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