The RBI Monetary Policy Committee’s (MPC) decision to keep interest rates unchanged — a “wait and watch” approach, in the Governor’s words — is a sensible move. The challenge before the MPC is that the main tool it has — the repo rate — impacts growth and inflation in opposite ways. That is, if it had raised rates to try to contain an anticipated surge in inflation, this would have hurt growth. On the other hand, if it lowered rates to boost growth, this would have pushed inflation up. A rate change at this juncture could have made matters significantly worse and further dampened the mood in the economy.

Source: The Hindu April 10, 2026 03:19 UTC