FOCUS_KEYWORD: RBI Policy Rates
SEO_TITLE: RBI Holds Key Rates, Cites Inflation Caution
SEO_DESCRIPTION: India’s central bank maintains RBI policy rates steady, signaling a cautious approach amidst persistent inflation concerns and global economic uncertainties.
TAGS: RBI, Monetary Policy, Interest Rates, Inflation, Indian Economy, Financial Markets, Banking Sector, GDP Growth, Central Bank, Economic Outlook, Repo Rate, Reverse Repo, D-Street, Fiscal Policy, Global Economy, Financial Stability, India
CONTENT:
MUMBAI – India’s central bank, the Reserve Bank of India (RBI), today decided to keep its key lending rates unchanged for the seventh consecutive policy review, aligning with market expectations. The Monetary Policy Committee (MPC) unanimously voted to retain the repo rate at 6.50%.
This decision underscores the RBI’s continued focus on anchoring inflation within its target range while supporting economic growth. The standing deposit facility (SDF) rate remains at 6.25% and the marginal standing facility (MSF) rate at 6.75%.
Retail inflation, measured by the Consumer Price Index (CPI), has shown some moderation but remains above the RBI’s medium-term target of 4%. Elevated food prices continue to pose upside risks to the inflation outlook.
The central bank reiterated its commitment to withdrawing accommodation to ensure inflation progressively aligns with the target. This stance indicates a cautious approach despite strong domestic economic activity.
RBI Governor Shaktikanta Das highlighted global uncertainties stemming from geopolitical tensions and commodity price volatility. These external factors continue to cloud the outlook for domestic inflation and economic stability.
The RBI projects India’s real GDP growth for the current fiscal year (FY25) at 7.0%, with resilient domestic demand providing a strong foundation. However, global demand conditions remain somewhat subdued.
An expert viewpoint suggests this measured stance is crucial for maintaining macro-financial stability amidst evolving global headwinds. “The central bank’s ‘wait and watch’ approach is prudent, balancing growth aspirations with the imperative of price stability,” stated a leading economist.
Analysts believe any rate cuts are unlikely in the immediate future, with the RBI preferring to observe sustained moderation in inflation. The focus remains on data-driven policy actions as the economic landscape evolves.
