The Reserve Bank of India’s Monetary Policy Committee on Friday decided to keep the repo rate unchanged at 6.50% for the seventh consecutive time.

The repo rate is the interest rate at which the central bank lends money to commercial banks. The Monetary Policy Committee decides on changes to it every two months.

The increase in repo rates was paused in April after six consecutive hikes aggregating to 250 basis points since May 2022. A basis point is one-hundredth of a percentage point. Basis points are used to describe the percentage change in the value of a financial instrument.

On Friday, Reserve Bank of India Governor Shaktikanta Das, while announcing the first bi-monthly monetary policy for the current financial year, said that five members of the six-member committee had voted in favour of the decision to retain the repo rate at 6.5%.

“The MPC [Monetary Policy Committee] also decided by a majority of five out of six members to remain focused on the withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth,” he said.

The governor said the committee had projected the real gross domestic product, or GDP, growth for the financial year 2024-’25 at 7%.

He said the committee would remain vigilant of upside risks to food inflation.

“Food price uncertainties continue to weigh on the inflation trajectory going forward,” Das said. “A record rabi wheat production would help temper price pressure and replenish the buffer stocks.”

The governor added: “The tight demand supply situation in certain categories of pulses and the production outcomes of key vegetables warrant close monitoring, given the forecast of above normal temperatures in the coming months.”

Das also said that the Consumer Price-based Inflation for the financial year 2024-’25 has been projected at 4.5%. In February, the Consumer Price-based Inflation stood at 5.1%.