This is a pause, not a pivot, says RBI guv on surprise hold in key rates

Reserve Bank Governor Shaktikanta Das on Thursday made it clear that the decision to hold rates should be seen as a pause, and not as a pivot.

The rate-setting Monetary Policy Committee (MPC) will act on the rates as and when necessary, Das said.

“If I have to characterise today’s monetary policy in just one line…it’s a pause, not a pivot,” Das told reporters in the customary interaction with reporters after the announcement of the policy review.

Earlier in the day, the six-member MPC voted unanimously to keep the repurchase or repo rate unchanged at 6.50 per cent, surprising analysts who were expecting the central bank to make a final 25 basis points hike before opting to pause.

Das said RBI is keen to assess the cumulative impact of the rate actions done till now. There has been a cumulative hike of 250 basis points since May 2022.

Deputy Governor Michael Patra said RBI has marginally upped its FY24 growth estimate to 6.5 per cent primarily on assumption of a decline in the average oil price to USD 85 per barrel as against USD 90 per barrel earlier.