25 bps hike: No change in stance, par for the course

One cannot completely rule out the possibility that the pause button would be pressed at the next MPC meet. Future actions, both for policy rate and stance, will depend on evolving data

One could not have expected a better script from the Reserve Bank of India (RBI).

Its rate-setting body, the Monetary Policy Committee (MPC), has yet again hiked the policy rate by 25 basis points – the lowest since the rate-hiking cycle started in May 2022. (One basis point is a hundredth of a percentage point.) This takes the policy rate to 6.5 per cent, last seen in February 2019. Incidentally, at that time, Consumer Price Index (CPI) inflation was 2.57 per cent.

There is no change in the policy stance, which remains focused on the withdrawal of accommodation.

Predictably, both