RBI Keeps Interest Rates Steady Amid Caution Over Growth Outlook

The Reserve Bank of India (RBI) has decided to keep the key interest rate unchanged, maintaining the repo rate at 6.5%, in line with market expectations. The decision reflects the central bank’s cautious approach amid ongoing concerns over inflation and global economic uncertainty.

This marks the fifth consecutive policy meeting where the RBI has chosen to hold rates steady, prioritizing financial stability while keeping a close watch on evolving domestic and international risks.

RBI Governor Shaktikanta Das emphasized that while headline inflation has eased, the risks to economic growth remain. He noted that global headwinds, such as geopolitical tensions, high crude oil prices, and uneven monsoon patterns, could affect India’s future growth trajectory.

The central bank revised its inflation projection for FY25 to 4.5%, citing concerns over food prices, especially vegetables. However, the GDP growth forecast was retained at 7%, indicating cautious optimism for the current financial year.

The Monetary Policy Committee (MPC) continues to follow a “withdrawal of accommodation” stance, indicating that future decisions will depend on inflation trends and macroeconomic stability.

Analysts believe the RBI may keep rates steady for the next few quarters unless inflation rises sharply. The central bank's decision aligns with global peers who are also treading carefully amid economic uncertainties.

Overall, the RBI’s current policy stance highlights a delicate balance between supporting economic growth and maintaining price stability, with flexibility to respond to future shocks.