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<ul><li>The Reserve Bank of India’s (<keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword>) <keyword id="6357126" type="General" weightage="20" keywordseo="monetary-policy" source="Orion">Monetary Policy</keyword> Committee (<keyword id="6369693" type="General" weightage="20" keywordseo="mpc" source="Orion">MPC</keyword>) kept the repo rate unchanged at 6.5%. </li><li>The MPC has hiked the repo rate six times, with the total quantum of rate hikes standing at 250 basis points since May 2022. </li><li>Economists had<a href="https://www.businessinsider.in/finance/news/rbi-largely-expected-to-hike-repo-rate-by-25-bps-in-april-even-as-us-fed-expected-to-take-a-pause/articleshow/98635125.cms"> predicted</a> a 25-basis point rate hike as retail inflation in January and February came above RBI’s upper tolerance limit. </li></ul>The Reserve Bank of India’s Monetary Policy Committee (MPC) has decided to keep the policy repo rate unchanged at 6.5%, on Thursday. The MPC had unanimously decided to keep the repo rate unchanged, RBI governor Shaktikanta Das said in his speech. “The decision to pause repo rate is for this meeting only. MPC will not hesitate to take further action in future meetings if it’s needed,” he added. The committee also estimates that the annual inflation for FY24 will be at 5.2%. Das said that the fight against inflation is not yet finished. “The war against inflation will continue until we see a durable decline in inflation, closer to the target,” Das said. Retail inflation came in above 6% in <a href="https://www.businessinsider.in/india/news/economists-are-shocked-concerned-and-worried-as-retail-inflation-hits-3-month-high-in-january/articleshow/97900258.cms">January</a> and <a href="https://www.businessinsider.in/finance/news/retail-inflation-sees-marginal-fall-to-6-44-in-february-2023/articleshow/98610218.cms">February</a>, above RBI’s 6% upper tolerance limit. The MPC has hiked repo rate six times since May last year, with the total quantum of rate hikes standing at 250 basis points, taking the repo rate from 4% to 6.5%. The last rate hike was <a href="https://www.businessinsider.in/finance/news/rbi-hikes-interest-rates-by-25-basis-points-to-6-5-says-core-inflation-remains-sticky/articleshow/97716217.cms">announced in February</a> this year at 25 basis points, with RBI governor Shaktikanta Das stating core inflation has remained sticky. “It is now necessary to evaluate the cumulative impact of these rate hikes. Under these circumstances, we have to be extremely prudent in our actions. We have always been really watchful and have adopted a calibrated and balanced approach,” Das added. While the year of 2023 began on a promising note with resilience in economic activity, the narrative has changed in March, he said adding, “Global markets are undergoing a renewed phase of turmoil,” speaking about the banking turmoil in advanced economies during his speech. <cmsannotation type="cmsannotation" annotationid="Economists had expected a 25-basis point hike" comment="subhead" text="Economists had expected a 25-basis point hike">Economists had expected a 25-basis point hike</cmsannotation> Economists had<a href="https://www.businessinsider.in/finance/news/rbi-largely-expected-to-hike-repo-rate-by-25-bps-in-april-even-as-us-fed-expected-to-take-a-pause/articleshow/98635125.cms"> predicted</a> a <keyword id="17051598" type="General" weightage="20" keywordseo="25-basis-point" source="Orion">25 basis point</keyword> rate hike due to a spike in inflation. Economists maintained their stance despite the banking sector crisis in the US and Europe. A few also believed that the RBI would take a pause after the April hike. “We expect a pause on rates to allow the lagged impact of hikes to filter through, a likely benign inflation profile (with an eye on risks) and attention on growth conditions,” said Radhika Rao, executive director &amp; senior economist at DBS Group Research. However, SBI Research <a href="https://www.businessinsider.in/finance/banks/news/rbis-mpc-could-pause-rate-hikes-in-april-to-gauge-the-impact-of-hikes-so-far-sbi-research/articleshow/99030220.cms">struck a contrasting note</a>, underlining that the MPC might want to assess the impact of the 250 basis point hikes done so far. It’s also exactly what Das said during the announcement, adding that the MPC will be closely monitoring the evolving inflation outlook. <cmsannotation type="cmsannotation" annotationid="Real estate body had urged RBI to halt rate hikes" comment="subhead" text="Real estate body had urged RBI to halt rate hikes">Real estate body had urged RBI to halt rate hikes</cmsannotation> The real estate sector in particular has been requesting the RBI to take a pause in rate hike, to stem the rising home loan rates, and its impact on homebuyers — both old and new. The Confederation of Real Estate Developers’ Association of India (CREDAI) had sent a formal <a href="https://www.businessinsider.in/finance/news/repo-rate-hike-will-slowdown-real-estate-reverse-post-covid-trends-says-industry-body-to-rbi/articleshow/99117620.cms">request</a> seeking a pause, to prevent stress in the real estate sector. "In the past one year, the cost of construction has risen rapidly due to the gradual increase in <keyword id="128554" type="General" weightage="20" keywordseo="repo-rates" source="Orion">repo rates</keyword> by RBI, which has adversely impacted many developers as they struggle to cope up financially," said Harsh Vardhan Patodia, President, CREDAI. Ramani Sastri, Chairman and MD, Sterling Developers also said that another rate hike might slow down home buying decisions for a short to medium term. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/after-the-ides-of-march-analysts-pick-best-stocks-that-can-be-bought-on-dips/articleshow/99272438.cms">After the Ides of March, analysts pick best stocks that can be bought on dips</a> <a href="https://www.businessinsider.in/finance/news/-jio-financial-services-demerger-and-listing-a-key-moment-for-reliance-stock/articleshow/99264110.cms">Jio Financial Services demerger and listing a ‘key moment’ for Reliance stock</a> <a href="https://www.businessinsider.in/finance/banks/news/loan-growth-showing-signs-of-reversal-from-cyclical-highs-but-asset-quality-to-remain-healthy/articleshow/99245377.cms">Loan growth showing signs of reversal from cyclical highs, but asset quality to remain healthy</a>

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RBI’s Monetary Policy Committee keeps repo rate unchanged at 6.5%, for now

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