The Reserve Bank of India s Monetary Policy Committee (MPC) decided to keep benchmark lending rates unchanged for the fifth consecutive meeting, maintaining the repo rate at 6.50%. The MPC s GDP growth forecast for FY24 was raised to 7%, with inflation expected to be 5.4%. The committee also retained its policy stance at withdrawal of accommodation.
If real interest rates remain elevated and they will if the RBI holds on to its unerring focus of bringing headline inflation to 4 percent, it is likely to dampen demand and even investments from firms.