MUMBAI -The Reserve Bank of India kept its key interest rate unchanged on Thursday, as widely expected, retaining its focus on bringing inflation down even as global market volatility left other major central banks poised to ease policy.
All 59 economists in the Reuters poll conducted in late July predicted the central bank would stand pat on rates. "We continue to expect scope for change in stance in the October policy with rate cuts beginning from December."The 10-year benchmark bond yieldrose slightly to 6.8731% from 6.8678% before the policy decision, while the Indian rupee was nearly flat at 83.95 against the dollar.
While Indian equities fared better, the rupee fell to all-time lows, prompting central bank intervention. "Policy guidance reinforced that domestic considerations will be prioritised, despite a sharp buildup in rate cut pricing for the U.S. Federal Reserve," said Radhika Rao, senior economist at DBS Bank in Singapore.The RBI kept its growth forecast for fiscal 2025 unchanged at 7.2%, slower that the 8.2% expansion in fiscal 2024.The central bank also retained its inflation forecast at 4.5% in the current year.