Reserve Bank of India goes for a hawkish pause

The RBI has paused because it wants to evaluate the cumulative impact of the past rate hikes

It has not exactly been a close call. All six members of the Monetary Policy Committee (MPC), the Reserve Bank of India’s rate-setting body, have unanimously decided in favour of keeping the policy rate unchanged at 6.5 per cent.

However, this is a “hawkish” pause as RBI Governor Shaktikanta Das’s statement repeatedly emphasised on the Indian central bank’s “readiness to act, should the situation so warrant”.

In his interaction with the media, he was even more emphatic – “It’s a pause, not a pivot.”

Simply put, the pause does not signify the end of the rate hike cycle in India