RBI Maintains Rates: A Strategic Pause Amid Economic Adjustments

The Reserve Bank of India (RBI) decided to maintain the policy rate unchanged for the 11th time, but revised the GDP growth forecast to 6.6% from 7.2%. This decision aims to stabilize the economy despite a 7-quarter low GDP growth of 5.4%, while also adjusting inflation targets accordingly.

The Reserve Bank of India (RBI) made a strategic decision to keep the policy rate unchanged for the 11th time, even as it revised the GDP growth forecast downward to 6.6% for the current fiscal year, a significant drop from the earlier projection of 7.2%.

Despite the economic slowdown evident in the July-September quarter's seven-quarter low GDP growth rate of 5.4%, RBI opted to maintain its interest rate, halting the cycle of rate increases paused in April 2022, after six successive hikes.

RBI's move includes a reduction in the Cash Reserve Ratio to 4%, releasing Rs 1.16 lakh crore to boost lending by banks, while reassessing inflation to 4.8%. The recent Monetary Policy Committee meeting featured new members, underscoring changes in RBI's strategic approach.

(With inputs from agencies.)