RBI MPC: Reserve Bank of India (RBI) Governor Sanjay Malhotra, in the August Monetary Committee Meeting (MPC) on Wednesday announced that the central bank would keep the policy repo rate unchanged at 5.5 per cent. The MPC also decided to continue with the ‘neutral’ stance. The governor said that the uncertainty of tariffs still continues.

“The Monetary Policy Committee met on August 4, 5 and 6 to deliberate and decide on the policy repo rate. After a detailed assessment of the evolving macroeconomic and financial developments and outlook, the MPC voted unanimously to keep the policy repo rate under the liquidity adjustment facility lap unchanged at 5.5 per cent,” he said during the announcements on Wednesday.

In the previous MPC in June, the RBI had reduced the policy repo rate by 50 basis points (bps) to 5.5 per cent with immediate effect. The central bank changed its stance from ‘accommodative’ to ‘neutral’.

The RBI Governor said that the impact of a 100 bps rate cut is still unfolding. The RBI had cut repo rate by 100 bps in quick succession since February. 

The Governor said that the domestic growth is holding up and is broadly revolving the lines of assessment. “Even though there were some high-frequency indicators that showed missed signals in May this year. Rural consumption remains resilient while urban consumption revives. Fixed investment supported by buoyant government capex continues to support economic activity,” he said.