No concern on growth, no comfort on inflation

Not too many were expecting a rate cut by the Reserve Bank of India (RBI) despite the recent turmoil in global markets and near-certainty about the US Federal Reserve's first rate cut in four years in September.

But there had been talks about a possible change in the stance.

RBI Governor Shaktikanta Das has just two words for the market: Have patience.

The markets seemed to have listened to him.

Movements in both bond yield, as well as currency, were muted in the absence of any surprise in the policy.

It's pretty obvious that at this point, the Indian central bank has no concern on growth and no comfort on inflation.

So, the status quo continues for the ninth policy in a row. The repo rate, or the rate at which the RBI extends funds to banks, remains unchanged at 6.5 per cent. The stance, too, remains the same-withdrawal of accommodation to "ensure that inflation progressively aligns to the target, while supporting growth".

Like in the past, Das has refrained from any forward guidance. The undertone is neither hawkish nor dovish-it's neutral. While those expecting a change in the stance are disappointed, others who were afraid of any tightening measure to drain excess liquidity from the system have heaved a sigh of relief. In that sense, it's a please-all policy, par for the course.

The RBI estimate of growth, as well as, inflation for the current financial year remains unchanged, but there has been some fine-tuning.

For instance, the real GDP growth estimate for FY25 is 7.2 per cent-there is no change from the figure announced in June. But the growth for the first quarter has been pared from 7.3 per cent to 7.1 per cent. The projection for the first quarter of FY26 is 7.2 per cent.

Similarly, the retail inflation estimated for the year remains unchanged at 4.5 per cent.