RBI holds repo rate, keeps stance neutral

The Reserve Bank of India's monetary policy committee (MPC) on Wednesday decided to maintain the status quo in terms of its two key monetary policy decisions: the policy rate and its monetary policy stance.

- Roshan Kishore

The former continues to be at 5.5% and the latter will continue to be neutral. White holding rates constant was decided unanimously, two external MPC members asked for changing the policy stance from neutral to accommodative.

However, RBI governor Sanjay Malhotra made it clear that a rate cut in the next MPC meeting scheduled for December could well be a possibility as inflation continues not to be a risk, even as "growth continues to be below our aspirations". Experts believe that RBI's wait and watch mode in the October MPC is meant to assess the impact of tariff disruptions and GST boost to consumption during the festive season.

"The trade-related uncertainties are also unfolding. The MPC, therefore, considered it prudent to wait for the impact of policy actions to play out and greater clarity to emerge before charting the next course of action," Malhotra said.