INSTANT VIEW-India's central bank leaves rates unchanged, as expected

Feb 8 (Reuters) - India's key rate was left unchanged for a sixth straight meeting on Thursday, in line with expectations, as inflation remained above the central bank's 4% medium-term target while economic growth continued to be resilient.

The six-member monetary policy committee (MPC), consisting of three Reserve Bank of India (RBI) and three external members, left the key repo rate unchanged at 6.50% after having raised it by 250 basis points between May 2022 and February 2023.

The committee said it would remain focused on 'withdrawal of accommodation', suggesting the central bank intends to keep monetary policy restrictive.

COMMENTARY:

GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA CAPITAL, MUMBAI

"As expected, the MPC maintained status quo on policy rate as well as stance while continuing to focus on anchoring inflation towards 4% and guarding towards any unanticipated shocks emerging from food and supply chain disruptions."

"We do not see RBI changing stance before the first quarter of FY25 and see room for the first rate cut emerging only by the second quarter of FY25. We see a total of 75 bps rate cuts in the upcoming rate-cutting cycle."

UPASNA BHARDWAJ, CHIEF ECONOMIST, KOTAK MAHINDRA BANK, MUMBAI

"The change in stance could follow towards the end of the first quarter of FY25 and subsequently, (we could see) shallow rate cuts starting in the back half of FY25."

ANUJ PURI, CHAIRMAN, ANAROCK GROUP, MUMBAI

"The RBI once again decided to keep the repo rates unchanged at 6.5%, thus extending the festive bonanza that it gave to the homebuyers in its last two policy announcements."

"Thus, homebuyers retain their advantage of relatively affordable home loan interest rates."

SAKSHI GUPTA, PRINCIPAL ECONOMIST, HDFC BANK, GURUGRAM

"We expect the RBI to keep liquidity in deficit until transmission of past rate hikes is complete. The central bank is likely to change its stance in the first quarter of FY25 and start its rate cut cycle only by the second quarter of FY25."

"However, the chances of rate cuts coming in later than expected rather than sooner are increasing, given the RBI's cautiousness on inflation." (Reporting by Rama Venkat, Anisha Ajith and Navamya Ganesh Acharya in Bengaluru; Editing by Savio D'Souza)