India Central Bank Holds Key Rate; Shifts Stance To Neutral

(RTTNews) - The Reserve Bank of India maintained its interest rate for the tenth straight meeting on Wednesday, as widely expected, and shifted its monetary policy stance to neutral.

The Monetary Policy Committee, led by Governor Shaktikanta Das, voted 5-1 to keep the policy repo rate unchanged at 6.50 percent.

MPC member Nagesh Kumar voted to reduce the policy repo rate by 25 basis points. The repo has been at 6.50 percent since February 2023.

The MPC unanimously decided to change the monetary policy stance from withdrawal of accommodation to 'neutral' and remain unambiguously focused on a durable alignment of inflation with the target, while supporting growth.

The change in stance provides flexibility to the MPC while enabling it to monitor the progress on disinflation which is still incomplete, the bank said.

The central bank retained its real GDP growth projection for 2024-25 at 7.2 percent.

The CPI inflation for 2024-25 is projected at 4.5 percent, unchanged from the previous outlook.