For RBI, the elephantine task is still far from over

REPO RATE UNCHANGED AT 6.5% FOR THE 7TH TIME. FOCUS ON INFLATION TO ENSURE ITS DESCENT TO 4%

- JOYDEEP GHOSH

IT'S QUITE RARE for a Reserve Bank of India governor to wish that his monetary policies are able to make sure that "the elephant that has now gone out for a walk" returns to the forest and remains there on a durable basis. But Shaktikanta Das did precisely that while referring to inflation - the "elephant in the room" for the Indian economy two years ago.

That explains why RBI stuck to its hawkish policy tone on Friday. The first monetary policy in the new fiscal didn't spring any surprises in terms of rate action or stance. Consequently, both the equity and bond markets stayed almost flat, with the 10-year G-Sec rising a tad by 3 bps.

The Monetary Policy Committee (MPC) kept the policy repo rate unchanged for the seventh time at 6.5% by a 5:1 majority. The stance of the policy also remained unchanged at 'withdrawal of accommodation' with 5 out of 6 members voting forit.

Das said, "robust growth prospects provide the policy space to remain focused on inflation and ensure its descent to the target of 4%".The forecasts for GDP and inflation for FY25 remains unchanged at 7% and 4.5%, respectively, with risks equally balanced across quarters. But Das flagged that food price volatility remains a concern, although core inflation has fallen sharply in recent months to below 4%.