India Monetary Policy October 2023

India: RBI stands pat for fourth meeting in a row in October

On 6 October, the Reserve Bank of India (RBI) left the repo rate unchanged at 6.50%, as expected by the market. It also left its standing deposit facility and marginal standing facility rates unchanged at 6.25% and 6.75%, respectively. All board members voted for the decision. That said, the RBI effectively pushed in the direction of tightening by saying that it would consider selling Indian bonds to mop up excess liquidity.

As it did in the prior month, the RBI stressed the upside risks to inflation posed by rising prices for agricultural and energy commodities, justifying its decision to keep rates steady by stating that past tightening was still “working its way through the economy”; inflation remains above the RBI’s 4.0% target.

Meanwhile, the RBI also opted to keep its policy stance focused on the “withdrawal of accommodation”, maintaining a hawkish tone.

The majority of our panelists expect the RBI to keep holding the line through to the end of FY 2023 in March.

The RBI’s next meeting is due for 6–8 December.

Analysts at the EIU said: “We retain our forecast that the RBI will keep the policy rate at its current level until mid-2024, with risks leaning mainly towards rates having to be raised further or held at the current level for longer.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest