The Reserve Bank of India (RBI) on Friday decided to unanimously keep key interest rates unchanged while keeping an accommodative stance. As per the decision of the central bank’s Monetary Policy Committee (MPC), the policy repo rate, the benchmark at which RBI lends to banks, will stay at 4%, RBI Governor Shaktikanta Das said in a televised address. The reverse repo rate will continue to be 3.35%.

The MPC’s decision is on expected lines as inflation has surprised on the upside, remaining above the upper tolerance level of 6% for seven straight months now. Supply-side factors, such as unseasonal rains, labour shortages, higher services prices, higher commodity prices and higher taxes have contributed to a spike in both headline and core inflation.

The Reserve Bank of India (RBI) on Friday decided to unanimously keep key interest rates unchanged while keeping an accommodative stance. As per the decision of the central bank’s Monetary Policy Committee (MPC), the policy repo rate, the benchmark at which RBI lends to banks, will stay at 4%, RBI Governor Shaktikanta Das said in a televised address. The reverse repo rate will continue to be 3.35%.

The MPC’s decision is on expected lines as inflation has surprised on the upside, remaining above the upper tolerance level of 6% for seven straight months now. Supply-side factors, such as unseasonal rains, labour shortages, higher services prices, higher commodity prices and higher taxes have contributed to a spike in both headline and core inflation.