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2h ago

RBI Minutes Open Door to Easing but Keep Policy on Hold, Stance Neutral

Economists now look to the December meeting for a possible 25-basis-point trim depending on incoming data.

Japanese national flag hoisted atop of the Bank of Japan headquarters building is seen between traffic signals in Tokyo, Japan January 23, 2025. REUTERS/Issei Kato/File Photo
A drone view shows the Central Bank headquarters building in Brasilia, Brazil, December 26, 2024. REUTERS/Ueslei Marcelino
A view of Tel Aviv, amid the ongoing conflict in Gaza between Israel and Hamas and cross-border hostilities between Hezbollah and Israel, in Israel, September 24, 2024. REUTERS/Amir Cohen
Federal Reserve Governor Christopher Waller converses on the sidelines of a monetary policy conference at Stanford University's Hoover Institution in Palo Alto, California, U.S., May 9, 2025. REUTERS/ Ann Saphir

Overview

  • The Monetary Policy Committee left the repo rate at 5.50% and maintained a neutral stance, with a 4–2 majority against shifting to accommodative.
  • Governor Sanjay Malhotra wrote that lower inflation creates space to cut rates but said a move now would have limited impact as transmission of earlier 100 bps easing and recent fiscal measures is still unfolding.
  • Headline CPI fell to 1.54% in September, the RBI cut its FY26 inflation projection to 2.6%, and raised FY26 GDP growth to 6.8% after a strong first quarter.
  • Two external members, Nagesh Kumar and Ram Singh, urged an accommodative stance to signal readiness to ease, while others flagged external risks such as U.S. tariffs and warned ultra‑low inflation could be transitory.
  • The next MPC meeting is on Dec. 3–5, with markets pricing a potential 25 bp cut; on Oct. 16 Malhotra downplayed the tariff hit to India’s domestic‑driven economy and said the RBI aims to curb rupee volatility without targeting a level.