Inflation Above 5% in 2023-24, Lending Rate to Remain Unchanged at 6.5%: RBI

New Delhi: Following the three-day Monetary Policy Committee (MPC) meeting, the Reserve Bank of India (RBI) headed by Governor Shaktikanta Das lowered its inflation forecast for the financial year 2023-24 to 5.1 per cent from the earlier estimate of 5.2 per cent.

The RBI decided to keep the lending rate unchanged at 6.5% for the second consecutive time as inflation has moderated in recent months.

The RBI started increasing interest rates in May 2022 to control inflation. From then on, the RBI has raised the repo rate by 250 basis points in six consecutive hikes.

RBI Governor Das said headline inflation remains above the RBI’s target of 4% and is expected to remain so for the rest of the financial year. But the retail inflation has remained below the RBI’s target of 6 per cent for the past two years, Governor Das added. According to him, the GDP growth in the first quarter of this year will be 8 per cent.