India’s central bank kept its policy rate steady at 5.5% Wednesday in the face of rising tariff threats from U.S. President Donald Trump.
The move was in line with expectations from economists polled by Reuters, and comes after the Reserve Bank of India delivered an outsized cut of 50 basis points at its last meeting in June.
RBI Governor Sanjay Malhotra, in his monetary policy statement, said the decision was unanimous. He noted that while global trade challenges lingered, geopolitical uncertainties have “somewhat abated.”
The Nifty 50 index fell 0.18% after the decision, while the Sensex dipped marginally. The rupee strengthened marginally to trade at 87.72 against the dollar.
The RBI’s latest move comes as India navigates rising tensions with the U.S. over its trade ties with Russia. On Monday, Trump criticized India for purchasing Russian oil and weapons, threatening higher tariffs and an unspecified “penalty.”
