RBI keeps rate at 5.25% as Governor Sanjay Malhotra warns
The Reserve Bank of India (RBI) has decided to keep its main interest rate unchanged at 5.25% after its June 5 meeting, mainly because of ongoing concerns about rising prices and global uncertainty, especially in West Asia.
Governor Sanjay Malhotra said it is important to keep a close eye on inflation, since letting it get out of hand could mess with everyone's expectations.
India growth outlook 6.6%, inflation 5.1%
Alongside the rate decision, the RBI also trimmed India's growth outlook from 6.9% to 6.6%, and bumped up its inflation estimate from 4.6% to 5.1%.
High oil prices, tricky global trade, and unpredictable weather like El Nino are making things tough.
Still, Malhotra pointed out that India's economy is holding up better than many others right now.
Monetary Policy Committee split on rates
The meeting minutes showed that Monetary Policy Committee (MPC) members had different takes: some felt keeping rates steady was smart with no signs of overheating, while others thought stable food prices and moderate oil costs might allow for a more growth-friendly approach.
The recent gasoline and diesel price changes were also flagged as something to watch for future inflation trends.