RBI Monetary Policy: It's Just A Pause, Not A Pivot, Says Governor Shaktikanta Das

The MPC unanimously decided to keep policy repo rate unchanged at 6.5 per cent

Governor Shaktikanta Das said the job to decisively bring down inflation is "not yet finished", and RBI's policy priority continues to be price stability.

The Reserve Bank of India’s (RBI's) Monetary Policy Committee (MPC), headed by Governor Shaktikanta Das, on Thursday announced to keep policy rate unchanged at 6.5 per cent. The surprise move to hold repo rate should not be seen as an indicator of carrying out similar moves in the future, and the central bank will "not hesitate" in taking further action on rates if needed, Das said.

The MPC unanimously decided to keep policy repo rate unchanged at 6.5 per cent.

During the the customary interaction with reporters after the announcement of the policy review the governor said, "If I have to characterise today's monetary policy in just one line...it's a pause, not a pivot."

Earlier in the day, the six-member MPC unanimously decided to pause after repeated hikes in rate over the last 11 months, surprising analysts who were expecting the central bank to make a final 25 basis points hike before opting to pause. The benchmark policy rate (repo rate) is 6.5 per cent.

He said the job to decisively bring down inflation is "not yet finished", and RBI's policy priority continues to be price stability.

The central banking regulator is keen to assess the cumulative impact of the rate actions done till now, he said. There has been a cumulative hike of 250 basis points since May 2022. In his statement while announcing the policy review, Das pledged to hike interest rate again if needed, saying the decision to pause was "for this meeting only".

Speaking to reporters, the governor reminded that the RBI's target is to get headline inflation to 4 per cent from the 6 per cent levels at present, and the monetary policy will be working towards progressively aligning with the target.

Deputy Governor Michael Patra said RBI has marginally upped its FY24 growth estimate to 6.5 per cent primarily on assumption of a decline in the average oil price to $85 per barrel from $90 per barrel earlier.