RBI holds rates as food inflation persists
Governor says better weather and improved agricultural yields should relieve price pressures
The Reserve Bank of India (RBI) held its key interest rates today (August 8) as food price rises threaten to derail its path to disinflation.
In a 4–2 majority decision, the bank’s monetary policy committee (MPC) kept the repurchase (repo) rate at 6.5%, the standing deposit facility at 6.25% and the marginal standing facility at 6.75%. The MPC also decided by the same majority to continue its “withdrawal of accommodation” – a reduction in the money supply – in an effort to tame inflation.
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