RBI repo rate meet highlights (October 9): The Reserve Bank of India's Monetary Policy Committee (MPC) decided on Wednesday (October 9) to maintain a status quo on the repo rate, keeping the policy rate unchanged at 6.5 per cent for the tenth consecutive time.
This marks the fourth
RBI MPC meeting of the financial year 2024-25. The central bank holds six bi-monthly meetings annually, reviewing various macroeconomic indicators. Previous meetings this financial year took place in April, June, and August, with subsequent meetings scheduled for December and February. The six-member MPC began discussions on October 7, with the meeting set to conclude today.
Three new members were inducted into the MPC, replacing outgoing external members. Economist Saugata Bhattacharya, Dr Nagesh Kumar, director and chief executive at the Institute for Studies in Industrial Development, and Ram Singh, director of the Delhi School of Economics, now join Governor Das, executive director Rajiv Ranjan, and Deputy Governor Michael Debabrata Patra on the panel. The meeting is the first under a new policy committee following the appointment last week of three external members, well-known economists with academic and finance backgrounds.
The MPC is set to discuss key issues influencing India’s monetary policy. That includes inflationary pressures on food and fuel, rising crude oil prices, and tensions in West Asia. The meeting will also provide insight into India’s broader economic growth trajectory. Reports indicate that market analysts expect the central bank to maintain its current ‘wait-and-watch’ stance. However, some believe that the persistent inflationary concerns could prompt a potential rate hike. Nomura’s Sonal Verma expects a rate-cutting cycle to begin in October, while HDFC Bank sees possible policy accommodation if food inflation is controlled.
In its 50th monetary policy review, the RBI’s MPC decided to keep the repo rate unchanged at 6.5 per cent, maintaining its ‘withdrawal of accommodation’ stance. This was primarily due to food inflation-related concerns. External members Jayanth Varma and Ashima Goyal had advocated for a 25-basis-point rate cut and a neutral stance. Despite inflationary pressures being considered temporary, the RBI lowered growth expectations for the June quarter from 7.3 per cent to 7.1 per cent. The MPC cited weaker corporate profitability and government expenditure for this change.
The decision on interest rates will be announced by Governor Das at 10 am on October 9, followed by a press conference at noon. Both the announcement and the press briefing will be live-streamed across the RBI’s official social media channels, including YouTube, Facebook, and X (formerly Twitter). Governor Shaktikanta Das has so far dismissed calls for rate cuts, concerned that high food prices will prevent inflation from staying at the 4 per cent target level on a sustainable basis. However, with the US Federal Reserve now pivoting and other central banks following with rate cuts, pressure is building on the RBI to do the same, especially after good rainfall and predictions of a bumper harvest.
 "RBI MPC highlights: Inflation expected to remain elevated during September, October, says Das")
