The Reserve Bank of India’s (RBI's) rate-setting panel, Monetary Policy Committee (MPC), on Thursday stopped its rate-hike cycle by retaining the key lending rate at 6.5 per cent. It was widely expected that the MPC would press the pause as continuing rate cuts were not seen as productive.
RBI governor Shaktikanta Das said the repo rate has been kept unchanged on basis of macroeconomic and financial conditions. It remained focused on withdrawal of accommodation.
"The year 2023 began on promising note as supply conditions were improving, economic activity remained resilient, financial markets exuded greater optimism and central banks were steering their economies towards a soft landing. In just about a few weeks in the month of March, this narrative has undergone a dramatic shift. The global economy is now witnessing a renewed phase of turbulence with fresh headwinds from the banking sector turmoil in some advanced economies," said Das.
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