The six-member monetary policy committee (MPC) unanimously decided to maintain status quo on the policy repo rate to rein in retail inflation, which economists see going up in July due to rising prices of vegetables, cereals and pulses.

This is the third consecutive meeting that the committee has kept the repo rate unchanged at 6.50 per cent. The MPC met between August 8 to 10.

Repo rate is the interest rate at which banks borrow funds from the Reserve Bank of India (RBI) to overcome short-term liquidity mismatches. The MPC last raised this rate from 6.25 per cent to 6.50 per cent at its February meeting.

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The MPC decided by a majority of five out of six members is also stuck to its “withdrawal of accommodation to ensure that inflation progressively aligns with its 4 per cent target, while supporting growth” stance as systemic liquidity is at around ₹2.50 lakh crore now.

As per latest economic data, the Consumer Price Index (CPI)-based retail inflation rose to 4.8 per cent in June from 4.31 per cent in May.

At the same time, industrial growth, based on Index of Industrial Production (IIP), accelerated to a 3-month high of 5.2 per cent in May from 4.4 per cent in April.