More Stories

Informist, Friday, Jun. 6, 2025

 

Please click here to read all liners published on this story

--RBI Malhotra: Accommodative stance was just an intent 
--RBI Malhotra: Changed stance to neutral according to current situation 
--RBI Malhotra: Current conditions warranted change of stance 
--RBI Malhotra: Neutral stance means next move depends on upcoming data 
--RBI Malhotra: Neutral stance means rate can go either way 
--RBI Malhotra: All six MPC members were unanimous on change of stance 
--RBI Malhotra: Stance doesn't mean immediate action in next policy 
--RBI Malhotra:Accommodative, tightening doesn't mean rate change at next meet

MUMBAI – The Reserve Bank of India's decision to shift to a 'neutral' stance from 'accommodative' doesn't necessarily imply an immediate rate action in the next policy meeting, Governor Sanjay Malhotra said at the post-policy press conference Friday following the second bi-monthly monetary policy statement for 2025-26 (Apr–Mar). "Stance doesn't mean immediate action in next policy... accommodative, tightening doesn't mean rate change at next meet," Malhotra said.

 

Apart from changing the stance, the central bank's Monetary Policy Committee also unexpectedly lowered the policy repo rate by 50 basis points to 5.50%. The rate-setting panel's decision came as a surprise for the market. In an Informist poll of 14 economists and market participants, 13 had expected the MPC to lower the repo rate by 25 bps from 6.00%, while only State Bank of India had projected a 50-bps cut. The RBI also cut the cash reserve ratio by 100 bps to 3.00% of net demand and time liabilities, in four tranches. 

 

Malhotra said that the accommodative stance was "just an intent" and the change to neutral was supported by current conditions. "Current conditions warranted change of stance," he said. "MPC will continue to monitor the incoming data and especially given these uncertainties, we will move primarily on what the data suggests."

 

Further, the RBI governor added that neutral stance implies that future rate decisions will depend on upcoming data. "Neutral stance means next move depends on upcoming data and neutral stance means rate can go either way," he said. Malhotra said all six members of the MPC were unanimous on the decision to change stance.  End

 

Reported by Vaishali Tyagi

Edited by Tanima Banerjee

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.