MC EXCLUSIVE Won't be surprised if RBI hold rates steady for some time as inflation stays low: Economic Affairs Secretary

Reserve Bank of India

India’s central bank keeping its benchmark policy rate unchanged for some time won't come as a surprise, given that inflation remains under control, Economic Affairs Secretary Anuradha Thakur told Moneycontrol in an interview on February 3.

“Both inflation and interest rates have an optimal level for growth. After the initial cuts, which were one after another, the RBI is holding out, and I can’t hear the private sector complaining,” Thakur said. “Right now, there is a modicum of stability, and I would not be surprised if it remains like this for some time."

The comments come after the Reserve Bank of India (RBI) delivered a series of rate cuts through 2025 to support growth as price pressures eased.

The central bank has cut the repo rate by a cumulative 125 basis points, bringing it down to 5.25 percent, the lowest level since mid-2022.

After front-loading the easing cycle with back-to-back reductions earlier in the year, the RBI has paused in recent policy meetings.

Retail inflation, based on the consumer price index (CPI), stood at around 1.3 percent in December, sharply below the RBI’s medium-term target of 4 percent and well within its tolerance band of 2–6 percent.

Retail inflation touched a record low in October before edging up modestly in subsequent months.