RBI unexpectedly pauses interest rate on inflation concern, cuts GDP growth forecast
Mumbai: The Reserve Bank on Thursday unexpectedly kept benchmark interest rates unchanged on concerns of headline inflation breaching its medium-term target, despite a worrying slowdown in the economy.
After five consecutive cuts in interest rates this year, the six-member monetary policy committee (MPC) headed by RBI Governor Shaktikanta Das unanimously voted to hold the key repo rate at 5.15 per cent and reverse repo rate at 4.90 per cent.
Bankers and economists had widely expected the central bank to cut rates for a sixth time to support a slowing economy, whose growth rate slipped further to a six-year low of 4.5 per cent in the September quarter from 7 per cent a year back.
The RBI reiterated it would maintain an accommodative stance as long as it is necessary to revive economic growth but cut its GDP growth forecast to 5 per cent for the 2019-20 fiscal year (April to March) from 6 per cent earlier estimate.
"The MPC recognises that there is monetary policy space for future action. However, given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture," the committee said in a statement.
Das said this was a "temporary pause" in the interest rate cutting cycle and the MPC will be better placed to decide on it in February after more data comes in and the government brings out its Budget for 2020-21.
"Let the impact of 135 basis point cut play out more," he said adding timing was important rather than mechanically cutting rates.
In the five reductions this year, the RBI has cut key interest rate by a total of 135 basis points.
"The need at this juncture is to address impediments, which are holding back investments," the RBI said.
Stating that headline inflation at 4.6 per cent in October was "much higher than expected," the central bank raised upwards its inflation forecast for the second half of the fiscal year to 5.1-4.7 per cent from 3.5-3.7 per cent seen previously.
Inflation in October for the first time in more than a year breached the RBI's 4 per cent medium-term target. This primarily was due to uptick in prices of vegetables such as onion and tomatoes, Das said.
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'Ab kya hoga, ye rab jane...': Tharoor takes dig at failed US-Iran talks in Pakistan
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New Delhi (PTI): Senior Congress leader Shashi Tharoor on Monday took a swipe at the "failed" US-Iran peace talks in Pakistan with an Urdu couplet, saying only god knows now what will happen.
"Ab kya hoga, ye rab jane; Na woh mane, na ye mane (only god knows what will happen now as both sides did not agree)," Tharoor said on X, tagging a post-talks video clip of US Vice President J D Vance, who led the American delegation at the negotiations in Islamabad.
The United States and Iran failed to reach a peace deal at their historic 21-hour talks in Pakistan, leaving the fate of a tenuous two-week ceasefire in doubt, with both sides attempting to hold each other responsible for the collapse of the negotiations.
अब क्या होगा, ये रब जाने
— Shashi Tharoor (@ShashiTharoor) April 13, 2026
ना वो माने, ना ये माने https://t.co/DYrXpa7C8h
Vance said the Iranian side did not accept Washington's terms for ending the war even as the US presented its "final and best offer".
Hours after the talks collapsed, US President Donald Trump said on social media that the negotiations with Tehran failed as "Iran is unwilling to give up its nuclear ambitions".
Trump said the US Navy will actively interdict any vessel in international waters found to have paid tolls to Iran for transiting through the Strait of Hormuz, a critical shipping route that handles roughly 20 per cent of global oil and LNG (Liquefied Natural Gas).
Iranian Parliament Speaker Mohammad Bagher Ghalibaf, the head of the Iranian negotiation team, said it is for the US to decide whether it can "earn our trust or not".
The Iranian foreign ministry, without elaborating, said the US side resorted to "excessive" and "illegal demands".
The failure to reach an agreement has dimmed the prospect of reopening the Strait of Hormuz to stabilise the global energy marke
