The Reserve Bank of India kept its benchmark repo rate unchanged on Friday, the second consecutive meeting without a move, as a softer inflation print offset a firming rupee.
What the committee decided
Members voted to hold the policy rate, while raising the full-year real GDP growth projection to 7.2% from 7.0%. The committee retained its stance of withdrawing accommodation, with the stance remaining neutral.
Governor Ranjana Jaiswal said the decision reflected a balance between resilience in activity and a durable disinflation process, and that the committee would revisit the calibration in the next review.
Markets react
Government securities yields eased at the long end of the curve. The rupee strengthened against the dollar on the back of a softer monthly print in the trade balance.
Policy is now about persistence rather than direction.
What to watch
Two data points matter before the next meeting: the weekly inflation print, and the pace of corporate credit disbursal into the festival quarter. A marked acceleration in either would tighten the room the committee has left.