Mumbai: The Reserve Bank of India’s six-member Monetary Policy Committee (MPC) on Friday unanimously voted to keep the policy repo rate unchanged at 6.5 per cent for the ninth consecutive meeting, signalling continued caution in the face of elevated food inflation, even as the broader economy shows robust momentum.
RBI Governor Shaktikanta Das, announcing the committee’s decision at a press conference, said the MPC had also retained the stance of “withdrawal of accommodation” to ensure that inflation progressively aligns with the target of 4 per cent. He said the committee would remain “nimble and flexible” and closely monitor evolving domestic and global conditions.
The central bank retained its GDP growth forecast for FY2024-25 at 7.2 per cent, citing strong domestic consumption, buoyant capital expenditure, healthy corporate balance sheets, and a resilient services sector. “India remains the fastest-growing major economy in the world, and all high-frequency indicators point to continued momentum,” Das said.
Headline CPI inflation was projected at 4.5 per cent for FY25, with food inflation remaining the key upside risk. Vegetable prices, particularly tomato and onion, have seen sharp spikes in recent weeks due to erratic rainfall in key growing regions of Maharashtra and Karnataka.
Markets responded positively to the policy announcement, with the BSE Sensex rising 287 points and the Nifty 50 gaining 94 points in late afternoon trade. The 10-year government bond yield eased marginally to 6.92 per cent, reflecting relief that no hawkish surprises were sprung.
Banking sector analysts said the pause was broadly expected but noted that the window for a rate cut was unlikely to open before February 2025 at the earliest, given persistent food-driven inflation. HDFC Bank Chief Economist Abheek Barua said, “The RBI is in a wait-and-watch mode. Unless food prices cool substantially, a pivot is not on the immediate horizon.”
