RBI MAINTAINS STATUS QUO Growth forecast for FY25 raised to 7.2%

Economists see shallow rate cut in Oct-Dec qtr

- MANOJIT SAHA

The six-member monetary policy committee (MPC) of the Reserve Bank of India (RBI) on Friday decided to keep the policy repo rate unchanged at 6.5 per cent, with a majority vote of 4:2.

The MPC also continued with the stance of withdrawal of accommodation, while revising the growth forecast marginally higher to 7.2 per cent (from 7 per cent estimated earlier) for the current financial year.

External member Ashima Goyal joined Jayanth Varma for rate cut of 25 basis points (bps) and change in stance to neutral while the other four members voted in favour of the rate and stance resolution. Till the last meeting, Varma was the lone voice for change in rate and stance.

"Inflation continues to moderate, mainly driven by the core component...

Food inflation, however, remains elevated," RBI Governor Shaktikanta Das said while explaining the MPC's decision. "We are on the right track, but there is still work to be done," he said, reiterating that with growth holding firm, monetary policy has greater elbow room to pursue price stability to ensure that inflation aligns with the target on a durable basis.