Reserve Bank of India Governor Sanjay Malhotra on Wednesday ruled out interest-rate cuts in the near term, saying the central bank’s next policy move could only be another rate hike or a pause depending on how inflation and other economic conditions evolve.
The guidance came after the Monetary Policy Committee raised the repo rate by 25 basis points to 5.50% from 5.25% and shifted its monetary policy stance to “calibrated tightening” from “neutral”.
“Rate cuts are off the table” in the near term, Malhotra said, adding that policy action ahead would either involve a rate hike or a pause depending on evolving conditions.
The October increase is the RBI’s first repo-rate hike since February 2023, when the MPC had raised the policy rate by 25 basis points to 6.50%.
The change in stance was backed by four of the six MPC members, while two members voted against moving to calibrated tightening.