RBI Holds Rates Steady but Signals Neutral Stance

The Reserve Bank of India kept policy rates unchanged for the tenth consecutive time, shifting to a neutral stance potentially suggesting future rate cuts. Governor Shaktikanta Das highlighted vigilance over elevated food inflation amid strong GDP growth. The Monetary Policy Committee saw new members appointed by the government.

The Reserve Bank of India (RBI) announced on Wednesday its decision to maintain the policy rate status quo for the tenth straight time. However, the central bank shifted its stance to 'neutral', indicating possible cuts in future policies.

This decision came despite the US Federal Reserve decreasing its benchmark rates by 50 basis points in the previous month. Central banks in several developed countries have also lowered their interest rates.

In the fourth bi-monthly monetary policy announcement for the current financial year, RBI Governor Shaktikanta Das stated that the Monetary Policy Committee has kept the repo rate steady at 6.5 percent, while expressing concern over rising food inflation amidst robust GDP growth. This meeting marked the first gathering of the reconstituted Monetary Policy Committee.

(With inputs from agencies.)