Shillong: The Reserve Bank of India’s Monetary Policy Committee voted to keep benchmark interest rates at 5.25 percent during its early June meeting. All six members of the committee supported this pause, favoring a cautious stance while navigating high uncertainty regarding future inflation and national growth.
Governor Sanjay Malhotra, who chairs the committee, pointed to several external pressures including the ongoing conflict in West Asia and potential supply chain disruptions. He also highlighted the unpredictable nature of monsoon rainfall and its eventual impact on food and energy commodity prices. Explaining his decision, Malhotra stated, “I would prefer to adopt a wait-and-watch approach.”
Deputy Governor Poonam Gupta echoed these sentiments, suggesting it is too early to shift the current policy cycle. She noted that tightening policy now could exacerbate economic pain while global indicators remain volatile. Gupta emphasized that a resolution to the West Asia conflict could rapidly improve the economic outlook, requiring a fresh evaluation of current growth and inflation dynamics.
The committee, which previously opted for a status quo in April, continues to monitor emerging data. RBI Executive Director Indranil Bhattacharyya added that current inflation projections remain subject to significant variables. He specifically noted the need to observe how recent spikes in wholesale inflation eventually influence consumer prices and how the upcoming monsoon season shapes the domestic crop outlook.
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