The Reserve Bank of India’s Monetary Policy Committee unanimously voted to keep the benchmark repo rate unchanged at 5.25% at its first MPC meeting of the financial year. The committee also decided to maintain the policy stance as ‘neutral.’ RBI Governor Sanjay Malhotra said that amid evolving political and economic conditions, headline inflation remains contained below the 4% target.
RBI Maintains Status Quo on Rates, Warns West Asia Conflict May Weigh on Growth
Policy stance retained at ‘neutral’ as inflation remains within target band. Central bank flags upside inflation risks from energy prices and weather disruptions
RBI Maintains Status Quo On Rates, Growth Projection
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The central bank’s primary mandate is to maintain inflation at 4%, with a tolerance band of +/-2%. However, Malhotra added that upside risks to the inflation outlook remain elevated, driven by higher energy prices and potential weather-related disruptions that could affect food prices.
“The MPC further noted that high-frequency indicators up to February suggest a continuation of strong momentum in economic activity. Growth impulses continue to be supported by robust private consumption and investment demand. However, the West Asia conflict is likely to impede this growth,” Malhotra said.
(This is a developing story.)