India's central bank keeps rates steady at 5.5% as Trump ratchets up tariff threats

India's cardinal slope kept its argumentation complaint dependable astatine 5.5% Wednesday successful the look of rising tariff threats from U.S. President Donald Trump.

The determination was successful enactment with expectations from economists polled by Reuters, and comes aft the Reserve Bank of India delivered an outsized chopped of 50 ground points astatine its last gathering successful June.

During its past meeting, RBI Governor Sanjay Malhotra said that fixed the 50-basis-point cut, determination was constricted country for monetary argumentation to enactment growth, and arsenic such, the RBI would power its stance to "neutral" from "accommodative."

This means that the Monetary Policy Committee, which is the RBI's cardinal decision-making body, volition cautiously measure the "incoming information and the evolving outlook to illustration retired the aboriginal people of monetary policy," Malhotra said.

Analysts astatine Bank of America said successful a July 28 enactment that the RBI "took distant the punchbowl from the markets" by delivering an early, assertive cut. They expect the cardinal slope to intermission for now, and further argumentation enactment volition lone beryllium deployed if determination is simply a large displacement successful the macroeconomic outlook.

However, the BofA analysts near the doorway unfastened for a imaginable complaint chopped aboriginal this twelvemonth — apt successful the 4th fourth of 2025 — erstwhile the GDP maturation outlook becomes clearer.

India's latest ostentation speechmaking inactive looks supportive for a complaint cut, with the header ostentation complaint successful June hitting a caller six-year debased of 2.1%.

Meanwhile, India's system expanded astatine a faster-than-expected yearly complaint of 7.4% successful the 4th ended March, sharply higher than the 6.7% maturation forecast by economists successful a Reuters poll. That 4th marked the extremity of India's 2024-25 fiscal year, which registered an wide economical maturation of 6.5%, successful enactment with the government's estimate.

The RBI's latest determination comes arsenic India navigates rising tensions with the U.S. implicit its commercialized ties with Russia. On Monday, Trump criticized India for purchasing Russian lipid and weapons, threatening higher tariffs and an unspecified "penalty."

— This is breaking news, delight cheque backmost for updates.