Policy space exists for further rate cut: RBI Guv at MPC meeting

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Reserve Bank Governor Sanjay Malhotra opined that there is room for a further rate cut and indicated it would be done at an opportune time to have a desirable impact, according to the minutes of the monetary policy committee (MPC) meeting released on Wednesday.

The governor, along with five other members of the MPC, had voted for the status quo on the short-term benchmark lending rate at the meeting that concluded on October 1.

During the meeting, Malhotra said the benign outlook for headline and core inflation as a result of the downward revision of projections opens up policy space to further support growth.

"...even though there is a policy space to further cut the policy rate, I feel this is not the opportune time for the same, as it will not have the desirable impact.

"Therefore, I vote to keep the policy repo rate unchanged at 5.50 per cent. The intent of policy, nevertheless, is to continue to facilitate growth-enabling conditions," he said.

MPC member and RBI Deputy Governor Poonam Gupta said the growth-inflation mix has potentially opened some space for lowering the policy rates further.

The next meeting of the MPC is scheduled for December 3 to 5, 2025.