The Reserve Bank of India kept the repo rate unchanged at 5.25 percent after its three day Monetary Policy Committee meeting concluded on Wednesday, even as the central bank sounded a fresh note of caution on inflation.
Why the repo rate was left untouched
All six members of the committee, led by Governor Sanjay Malhotra, voted to hold the rate steady at the meeting held in New Delhi. That means EMIs on home loans, car loans and other borrowings will neither ease nor rise for now. The central bank had already been holding rates steady for some time, signalling it wants to keep borrowing costs stable while it watches how the economy responds to current pressures.
Inflation forecast raised to near 6 percent
Governor Sanjay Malhotra said the central bank has had to raise its inflation projection to around 6 percent, up from its earlier estimate. The shift reflects how price pressures have built up in recent months, and suggests inflation could remain a key concern for the RBI in the months ahead.
Growth forecast held steady at 6.6 percent
Despite pressure from both global markets and the domestic economy, the RBI kept its growth forecast for the current financial year unchanged at 6.6 percent. That suggests the central bank remains confident about the pace of India's economic expansion even as it navigates the inflation challenge.
