A CNBC-TV18 poll had predicted the same. This was also in line with what other market watchers and economists were expecting. The decision to keep the rates unchanged was taken with a 5:1 majority.
However, India’s Central Bank has changed its stance to “neutral” from “withdrawal of accommodation” earlier. The decision to change the stance was taken unanimously.
The RBI MPC also left the Marginal Standing Facility (MSF) and Standing Deposit Facility (SDF) rates unchanged at 6.75% and 6.25%, respectively.
RBI Governor Shaktikanta Das, in his post-policy address said that the MPC considered it appropriate to change the stance to neutral and remain unambiguously focused on bringing inflation to RBI’s target range durably.
The governor also spoke about the eight years of the Flexible Inflation Targeting framework, saying that it has matured across interest rate cycles and monetary policies.
The central bank chief said that while rural demand is trending upwards, urban consumption is firm and private investment continues to gain steam.
India’s GDP forecast for the current financial year have been left unchanged at 7.2% by the RBI. For the second quarter, India’s GDP is likely to grow at 7% from the earlier projection of 7.2%. Projections for the first quarter of financial year 2026 have been revised higher to 7.3% from 7.2% earlier.
While the RBI left the current year inflation estimates unchanged at 4.5%, the Governor mentioned that the September figures may see a spike due to the base effect. He further added that significant risks to inflation from adverse weather events, geopolitical conflicts, and the recent increase in commodity prices continue to stare at us.
“Have to be careful about opening the gates, or the horse may bolt again,” Governor Das said.
The governor also had a word of caution for the Non-Banking Finance Companies (NBFC). He said that the RBI has observed some NBFCs, who are aggressively pursuing growth without building sustainable business practices and risk management.
Some NBFCs, including MFIs and HFCs are chasing excessive Returns on Equity (RoE) and concerns arise when interest rates charged by them become usurious. “Not generalising the entire NBFC sector, but there are outliers who we are engaging with,” he said.
The governor concluded the warning by saying “Self-correction, however, is the desired outcome of this message.”