Mumbai: Reserve Bank Governor Sanjay Malhotra and other members of the monetary policy committee (MPC) saw room for an interest rate cut earlier this month, but left the decision for an opportune time, the MPC meeting minutes released on Wednesday showed.
The next meeting of the rate-setting panel, MPC, is scheduled for December 3 to 5.
All six members of the MPC had unanimously decided to retain the short-term lending rate (repo) at 5.5 per cent because of global uncertainty, though domestic inflation was benign. During the meeting, Malhotra said the benign outlook for headline and core inflation as a result of the downward revision of projections opens up policy space to further support growth.
“...even though there is a policy space to further cut the policy rate, I feel this is not the opportune time for the same, as it will not have the desirable impact.
“Therefore, I vote to keep the policy repo rate unchanged at 5.50 per cent. The intent of policy, nevertheless, is to continue to facilitate growth-enabling conditions,” he said, according to the minutes of the MPC meeting, which concluded on October 1.
MPC member and RBI Deputy Governor Poonam Gupta opined that with the implementation of the rationalised GST rates since September 22, 2025, the inflation outlook appears to be more benign.
This, along with the lesser food price build-up has led the RBI to lower its current year inflation projection since the last policy by 50 bps to 2.6 per cent.
“The described growth-inflation mix, particularly slower growth in H2 and a benign inflation rate, has potentially opened some space for lowering the policy rates further; yet it is difficult for me to vote for a rate cut at this juncture,” she said.
RBI Executive Director and panel member Indranil Bhattacharyya too said it can be inferred that the sharp moderation in inflation has undoubtedly opened up policy space for further rate easing.