Leaving Mint Road observers surprised by holding the rates on Thursday, Governor Shaktikanta Das said RBI cannot keep cutting policy rates “mechanically every time”, but hinted at resuming the easing cycle after budget and analysing impact of previous 135 bps rate cuts on economy.
Significantly, even as the MPC hit the pause button unanimously, it massively slashed the growth forecast by a full 110 bps to 5 per cent, and also warned of a steep spike in retail inflation to 4.7-5.1 per cent in the second half.
After cutting repo rate five consecutive times to the tune of 135 bps to a nine-year low between February and October, Monetary Policy Committee left the policy rates unchanged at 5.15 per cent.
Every analyst was expecting Das to go for the sixth straight policy reduction by at least 25 bps and pause in the February review.
The decision to hit the pause button was unanimous by the six-member rate-setting committee, Das told reporters at the customary post-policy presser.