MPC minutes: Policy space exists for rate cut, but this is not the opportune time; says RBI Governor

Reserve Bank of India Governor Sanjay Malhotra indicated that policy space exists for a further rate cut, but the timing needs to be right to ensure the move has the desired impact, according to minutes of the Monetary Policy Committee (MPC) meeting released on Wednesday.Malhotra, along with five other MPC members, voted to maintain the short-term benchmark lending rate at 5.50% at the meeting that concluded on October 1. He said the benign outlook for headline and core inflation, following downward revisions of projections, has opened room for measures to further support growth."The prevailing global uncertainties and tariff-related developments are likely to decelerate growth in H2:2025-26 and beyond. While policy space exists to support growth, it is prudent to wait for the impact of front-loaded monetary and recent fiscal measures before deciding the next step," Malhotra said in the MPC minutes released on October 15. ."Even though there is policy space to further cut the rate, I feel this is not the opportune time as it may not yield the desirable impact. Therefore, I vote to keep the repo rate unchanged at 5.50%. The intent of policy is nevertheless to continue facilitating growth-enabling conditions." He added. RBI Deputy Governor and MPC member Poonam Gupta noted that the current growth-inflation mix potentially allows some room for a rate reduction. The MPC’s next meeting is scheduled from December 3 to 5, 2025.