The Reserve Bank of India (RBI) has decided to maintain its focus on the withdrawal of accommodation and has kept repo rates unchanged at 6.50% in line with market expectations. Furthermore, the central bank has retained its policy stance and the MPC panel unanimously voted in favour of halting rate hikes, with five out of six members backing the decision.
The equity markets remained steady following the announcement, with Sensex and Nifty 50 indexes rising by 0.1% each at 63,221.02 and 18,749.15 points respectively. Meanwhile, the Nifty Bank index increased by 0.2% to 44,382.15 points.
Despite the recent slowing of monetary policy tightening around the world, uncertainty remains as to the future trajectory of policy tightening, according to RBI Governor Shaktikanta Das. Although domestic macroeconomic fundamentals are strengthening, the outlook for the monsoon and the potential impact of El-Nino conditions remain uncertain.
In light of these factors, the central bank has decided to maintain its policy stance and to remain vigilant on the evolving situation. The MPC’s decision to maintain the policy stance will ensure that inflation progressively aligns with the target while supporting growth, said Das.
Overall, the RBI has chosen to maintain its cautious approach and will continue to monitor the economic landscape closely.
