The Reserve Bank of India, in its first policy meeting after the US Federal Reserve cut rates, kept the repo rate unchanged at 6.5%.

What Happened: Markets cheered RBI’s decision as Nifty jumped 0.80% to an intraday high of 25,219.10. Shriram Finance, Trent, Tata Motors, Bajaj Finance, and Cipla were the top gainers on Nifty in the morning. Sensex was up around 0.77% to trade at ₹82,672.30 points.

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RBI Governor Shaktikanta Das announced the unchanged repo rates after the RBI Monetary Policy Committee’s (MPC) three-day meeting. The repo rate is the interest at which RBI gives money to other banks in the country. Central banks typically raise repo rates to control the money supply in the economy to control inflation and vice versa.

The MPC also changed the policy stance from ‘withdrawal of accommodation’ to ‘neutral’. A neutral stance indicates that the central bank can raise or lower the interest rates with prioritises given to both inflation and growth. The earlier stance indicated the central bank’s intention to reduce liquidity in the economy to control inflation.

Analysts see the possibility of RBI cutting the repo rate in December after the change in policy stance.

RBI also kept India’s real GDP forecast at 7.2% for FY25.

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