RBI holds Interest Rates steady for 10th Time, signals potential future cuts

The Reserve Bank of India (RBI) has kept the policy rate unchanged for the tenth consecutive time, while shifting its stance to ‘neutral,’ which may indicate the possibility of rate cuts in upcoming policy announcements.

Despite the US Federal Reserve cutting its benchmark rate by 50 basis points last month, along with similar moves by central banks in some developed countries, the RBI opted to maintain its repo rate at 6.5 percent. This decision came as part of the fourth bi-monthly monetary policy for the current financial year, announced by RBI Governor Shaktikanta Das.

The RBI has maintained its current stance since February 2023. Governor Das noted that while India’s GDP growth remains strong, the central bank remains vigilant regarding elevated food inflation.

This policy review was the first meeting of the newly reconstituted Monetary Policy Committee (MPC), which now includes three newly appointed external members: Ram Singh, Saugata Bhattacharya, and Nagesh Kumar. The government reconstituted the MPC last month.