RBI keeps interest rates unchanged. Now, to wait and watch

The October meeting of the RBI’s Monetary Policy Committee was held against the backdrop of subdued inflation and seemingly healthy growth. Retail inflation stayed below the central bank’s inflation target for seven successive months, while the economy grew at a faster than expected 7.8 per cent in the first quarter of the financial year. Alongside, the GST Council, by rationalising the tax structure and bringing down the effective tax rates, provided a boost to consumption. But given the uncertain global environment and concerns over the underlying growth momentum, with Donald Trump’s tariffs putting exports under strain, there were expectations that the MPC should loosen policy further. That was not to be.

The MPC voted unanimously to keep the benchmark repo rate unchanged at 5.5 per ce