The Reserve Bank of India (RBI) on Wednesday decided to keep the key policy repo rate unchanged at 5.50 percent, marking the second pause in the ongoing rate cycle following the first pause in August. Earlier this year, the central bank had delivered a cumulative 100 basis point cut.
The Monetary Policy Committee (MPC), headed by RBI Governor Sanjay Malhotra, voted unanimously to maintain the status quo and retain a neutral policy stance.
“Since the August policy meet, significant developments have unfolded on the domestic front,” Governor Malhotra said, noting a mix of economic shifts and policy changes.
On inflation, the RBI highlighted that the overall outlook has turned notably more benign in recent months, with headline inflation revised down from 3.7 percent in June to 3.1 percent in August, and further to 2.6 percent most recently.
Governor Malhotra also cautioned that recent tariff-related decisions are likely to decelerate growth, underscoring the need for close monitoring of the macroeconomic environment.
