Reserve Bank of India keeps repo rate unchanged at 6.5%

India’s benchmark interest rates are currently stable, but the Reserve Bank of India’s rate-setting committee has adjusted its policy stance to neutral, indicating the potential for the first rate cut during the December policy meeting.

Five of the six members of the monetary policy committee voted to keep the repo rate unchanged at 6.5 per cent, and all six voted to shift policy stance to neutral from withdrawal of accommodation for the first time in two years, RBi Governor Shaktikanta Das said.

This aligns with a Mint poll of economists, which showed that 9 out of 10 economists anticipated that rates would stay the same.

The RBI’s three-day monetary policy committee (MPC) meeting took place from October 7 to 9, and Das is scheduled to hold a press conference at noon today.

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A ‘neutral’ stance suggests that the central bank can lower or raise the interest rate. This shows that the policy priority is equal on both fronts — inflation and growth.

Notably, in its last nine consecutive meetings since February 2023, the central bank has kept the repo rate unchanged at 6.50 per cent, with a view to balance inflation and economic growth.

The MPC also retained India’s FY25 GDP growth and inflation forecast at 7.2 per cent and 4.5 per cent, respectively.

RBI Panel Has New Members

The new members are Saugata Bhattacharya, economist; Dr Nagesh Kumar, Director and Chief Executive, Institute for Studies in Industrial Development; and Professor Ram Singh, Director, Delhi School of Economics, University of Delhi. They join RBI Governor and MPC Chairperson Das, Rajiv Ranjan, serving as Executive Director, and Michael Debabrata Patra, as the Deputy Governor.

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