Economists welcomed the RBI's “surprise move” to keep the repo rate unchanged but also warned that another rate hike "could be in the offing" if inflation does not come down.
On the whole, the RBI’s decision of keeping policy rate unchanged and accompanying hawkish statement seem to be the best course of action for now. But will it have the desired effect on inflation is a critical question.
The Reserve Bank of India (RBI) Governor Shaktikanta Das took most analysts by surprise today by keeping the policy repo rate unchanged at 6.50 per cent. Most of the analysts who spoke to various news channels and media houses were expecting the central bank to raise the repo rate by 25 basis points (bps) and then hit the pause button. aaa
RBI MPC: In the May 2022 policy, RBI increased the rate by 40 bps, followed by 50 bps in June, another 50 bps in August, 50 bps in September, 35 bps in September and 25 bps in February 2023 policy.