The Reserve Bank of India did not hike its lending rate (repo rate), in line with the consensus expectations of market watchers and economists. The repo rate was left unchanged at 6.5%, as announced in the August policy. A CNBC-TV18 poll had expected the Monetary Policy Committee to maintain a status quo.

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The decision to keep the rates unchanged was taken unanimously. The Monetary Policy Committee also decided by a 5:1 majority to remain focused on "withdrawal of accommodation."

The Governor in his speech said that India is focused on macro stability and fundamental growth. He further said that India is poised to become the new growth engine of the world.

"Have identified inflation as a major risk to macroeconomic stability and sustainable growth," the Governor said.

Explaining the rationale behind keeping interest rates unchanged, the Governor said that the transmission of the 250 basis points rate hike carried out by the Reserve Bank so far remains incomplete.

The RBI has also maintained its growth outlook for the financial year 2024 at 6.5%. The estimates for the upcoming four quarters have also been maintained at the levels announced in the August policy.

Governor Das highlighted headwinds from geo-political tensions, global economic slowdown and uneven monsoon as key risks to the outlook.

Inflation projections for the financial year 2024 were also left unchanged at 5.4%. The RBI expects inflation in the first quarter of financial year 2025 to be at 5.2%.

For the second quarter of the financial year 2024, the inflation projection has been raised to 6.4% from 6.2%, while that for the third quarter has been cut to 5.6% from 5.7% earlier.

"The risks are evenly balanced," the Governor said.

Minutes of this meeting of the Monetary Policy Committee will be published on October 20, 2023. The next MPC meeting has been scheduled from December 6-8, 2023

Follow all the live updates from the RBI Governor's Press Conference here.

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(Edited by : Amrita)

First Published:Oct 6, 2023 10:06 AM IST