RBI raises policy repo rate by 25 bps to 5.50%, signals no near-term rate cuts

The Reserve Bank's Monetary Policy Committee has increased the policy repo rate by 25 basis points to 5.50%, citing persistent inflation pressures in the economy. RBI Governor Sanjay Malhotra indicated that rate cuts are not expected in the near term as the central bank remains focused on controlling price levels.

The Indian economy is projected to grow at 7.1% for the current fiscal year, demonstrating underlying resilience. However, inflation is forecast at 5.2%, with core inflation expected around 4.4%, prompting the rate increase to anchor price expectations.