08:10 AM EDT, 08/09/2024 (MT Newswires) -- The Reserve Bank of India (RBI) kept the policy rate at 6.5% and the policy stance -- withdrawal of accommodation -- unchanged during its monetary policy meeting on Thursday, noted Societe Generale.

Four out of six members of the Monetary Policy Committee (MPC) voted in favor of maintaining the policy rate, which was unchanged from the previous meeting.

The Indian central bank also kept the inflation target for FY25 unchanged at 4.5% while expressing concerns about food price-driven inflation.

RBI Governor Shaktikanta Das mentioned that food inflation is transitory, although SocGen's research suggests its persistence, given that food accounted for 63% of headline inflation on average in the past year.

Given weak core inflation and real wages below pre-pandemic levels, the bank doesn't see any evidence of a second-round effect of persistently high food inflation.

The real gross domestic product (GDP) forecast was retained at 7.2% y/y, which is higher than SocGen's and India's Chief Economic Advisor's forecasts.

The optimistic growth expectation led to the decision to maintain the status quo in the policy rate, added the bank.

SocGen continues to anticipate the first rate cut by the RBI during Q4 2024.