RBI holds rates as food inflation persists

Governor says better weather and improved agricultural yields should relieve price pressures

reserve-bank-of-india
Nichalp/Wikimedia Commons

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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