RBI Holds Steady at 6.5% for Ninth Time Amid Inflation Watch

The Reserve Bank of India (RBI) has opted to keep its benchmark interest rate unchanged at 6.5%, aligning with market expectations. This decision marks the ninth consecutive time the central bank has maintained this rate.

RBI Governor emphasized that the economic growth in India remains robust, but inflation risks persist. Though there is an overall declining trend in inflation, the rate remains above the target level set by the central bank.

During the recent policy meeting, four out of six members of the Monetary Policy Committee (MPC) voted in favor of maintaining the benchmark repurchase rate at 6.5%. The inflation rate in India rose to 5.08% in June, exceeding the RBI's target level of 4% by more than 1 percentage point.

The decision to retain the interest rate highlights the central bank's cautious approach in its monetary policy, focusing on gradually unwinding accommodative measures while closely monitoring inflationary pressures. Governor expressed confidence in the continued strength of the Indian economy.

The RBI's stance reflects the balancing act central banks must perform between fostering economic growth and controlling inflation. As global economic uncertainties linger and domestic inflation remains a challenge, the RBI appears committed to a steady policy path.

Analysts expect that the RBI will maintain this cautious approach in the coming months, remaining vigilant on inflation trends and economic indicators before making any significant monetary policy shifts.