High rates not hurting growth: RBI governor

RBI Governor Shaktikanta Das (centre) with Dy Governors Michael Debabrata Patra (second from right), M Rajeshwar Rao (second from left), Swaminathan Janakiraman (right) and T Rabi Sankar address a press conference at RBI headquarters in Mumbai. Pic/PTI

Reserve Bank Governor Shaktikanta Das on Wednesday said that elevated interest rate is not impacting growth and economic activities are well sustained.

"At the moment, we don't see any evidence of higher interest rate impinging on growth. Growth continues to be very robust. Investment intentions are quite visible," Das said during a post-policy media interaction here.

Earlier in the day, the RBI decided to keep the policy rate unchanged for the tenth time in a row but changed its stance to ‘neutral' that may lead to a cut in the forthcoming policies.

"High rates have been there for more than one and half years now...(but) growth is holding firm and steady," he said.

The RBI has maintained a status quo on benchmark interest rates since April 2023. The last hike in policy rate was done in February 2023 by 25 basis points to 6.5 per cent in February 2023.

Experts: Move signals possible rate cut

The RBI's decision to change its stance to ‘neutral' from ‘withdrawal of accommodation' is significant, experts said. The RBI kept its key interest rate unchanged but took the first step towards a rate cut as it eased its relatively hawkish policy stance to neutral. The monetary policy committee, voted to keep repo rate - which governs interest rate of home, auto, corporate and other loans - at 6.5 per cent for a 10th straight policy meeting.

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