Instant view: India`s central bank leaves rates unchanged, as expected
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India's key rate was left unchanged for a seventh straight meeting on Friday, in line with expectations, as the central bank awaited a sustained fall in inflation towards its 4% target amid robust economic growth.
The six-member monetary policy committee (MPC), consisting of three Reserve Bank of India (RBI) and three external members, left the key repo rate unchanged at 6.50%.
Five out of six members voted in favour of the rate decision while the monetary policy stance of 'withdrawal of accommodation' was retained with a majority of five votes, suggesting the panel intends to keep policy restrictive.
COMMENTARY:
UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI
"The Monetary Policy Committee (MPC) on expected lines maintained status quo on rates and stance. While low core inflation provides comfort, the uncertainty on food inflation remains a worry."
"Further, the higher U.S. yields, higher oil prices and other commodities along with possible delay in Fed's rate easing cycle will keep the MPC wary."
"Accordingly, we do not see much scope for any rate easing until the second quarter of FY25."
DEVENDRA KUMAR PANT, CHIEF ECONOMIST, INDIA RATINGS AND RESEARCH, GURUGRAM
"We expect monetary easing either through rate cut or change in stance to begin from October 2024."
"The strong growth momentum may limit rate cut in easing cycle to 50 to 75 basis points."
SACHCHIDANAND SHUKLA, GROUP CHIEF ECONOMIST, LARSEN & TOUBRO, MUMBAI
"The Governor and RBI have done well to reiterate their conditional commitment to getting inflation within the comfort zone."
"The down move on rates will happen once there is further clarity on three things: monsoon forecasts by way of spatial and temporal distribution, presentation of the final budget and a definitive move from the Fed."
RADHIKA RAO, SENIOR ECONOMIST, DBS BANK, SINGAPORE
"The commentary belied expectations of any potential dilution in the stance despite softer CPI prints and plans for significant fiscal consolidation this year."
"In addition to risks from domestic weather and spillover risks on food segments, the recent up-move in global oil prices could also complicate the forward-looking inflation outlook."
ANUJ PURI, CHAIRMAN, ANAROCK GROUP, MUMBAI
"The decision to maintain status quo will keep the ongoing residential real estate sales momentum on course and unimpeded."
"Aspiring homebuyers eyeing a purchase will proceed with confidence."
