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USD/INR mostly steady as RBI holds rates for sixth meeting

The USD/INR currency pair steadied after recording an intraday low of 82.8950 on Thursday, as the Reserve Bank of India kept its benchmark repo rate unchanged at 6.5% for the sixth straight policy meeting in February, as largely expected.

The policy decision came after India’s annual inflation picked up to a four-month high of 5.69% in December, but remained within the central bank’s 2%-6% target range.

The RBI has delivered 250 basis points of interest rate hikes between May 2022 and February 2023.

According to RBI Governor Shaktikanta Das, monetary policy must still be actively disinflationary.

“The last mile of disinflation is always the most challenging and that has to be kept in mind,” the RBI Governor said in a statement.

“Stable and low inflation at 4% will provide the necessary bedrock for sustainable economic growth,” Das added.

5 out of 6 policy makers favored the rate decision and the monetary policy stance of “withdrawal of accommodation.” And, 1 Committee member voted in favor of a 25 basis point rate cut and a neutral stance.

“The central bank is likely to change its stance in the first quarter of 2024-25 and start its rate cut cycle only by the second quarter,” Sakshi Gupta, principal economist at HDFC Bank, was quoted as saying by Reuters.

“However, the chances of rate cuts coming in later than expected rather than sooner are increasing, given the RBI’s cautiousness on inflation.”

Elara Capital said it expected a total of 75 basis points of rate cuts when the RBI’s monetary easing cycle begins around the second quarter of 2024.

Meanwhile, the central bank kept its GDP growth forecast for the fiscal year 2024 unchanged at 7.3% and its inflation forecast at 5.4%.

As of 8:07 GMT on Thursday the USD/INR currency pair was inching up 0.04% to trade at 82.9825. is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

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