Reserve Bank of India Maintains Interest Rate

The Reserve Bank of India (RBI) has maintained its key interest rate at 6.50% for the eleventh consecutive meeting, citing persistent inflation pressures and disappointing economic growth. India's annual retail inflation rose to 6.21% in October, surpassing the bank's tolerance limit for the first time in over a year. Concurrently, the country's GDP growth slowed to 5.4% in the July-September quarter, marking its weakest performance in seven quarters. This economic slowdown has sparked concerns about the effectiveness of the RBI's restrictive monetary policies. With the current rate hold, investors are keenly observing for potential liquidity measures from the central bank that could alleviate the banking system's liquidity deficit and lower market interest rates. Economists anticipate that a rate cut may be more likely in February 2025 if inflation shows signs of moderation.