MUMBAI: Fearing a spike in inflation during the second half of the fiscal year and forecasting stronger economic growth, the Monetary Policy Committee (MPC), chaired by Reserve Bank of India (RBI) governor Shaktikanta Das, on Friday, left the key policy rates unchanged at 6.5 percent for the eighth consecutive time.
The last time the rate-setting panel tweaked the repo rate was a 35 basis points (bps) hike in the February 2023 review, taking it to a decadal high. The status quo stance comes even as the European Central Bank delivered a 25 bps cut on Thursday and the US Fed may follow suit sooner rather than later.
Voting for the status quo, the six-member panel led by Das said while growth remains stronger and came in more than expected in the past fiscal, printing in at 8.2 percent, the latest macro indicators show the economy gathering further momentum, leading the panel to increase the growth forecast by 20 bps—one basis point is one hundredth of a percent—to 7.2 percent for the current fiscal.
In the April and February reviews, the forecast was 7 percent.
