A message to the spokesperson of the Confederation of Indian Industry, which usually issues a statement, was not replied to, while various senior corporate executives said "no comments" when a reaction to the RBI's action was sought.
Though the Governor, Shaktikanta Das, went out of his way to clarify that fiscal concerns were only one input in the decision, it is obvious that the MPC wants to watch the government's moves in the budget before easing rates again.
The six-member monetary policy committee (MPC) unanimously voted to hold the key repo rate at 5.15 percent while the reverse repo rate was also held at 4.9 percent.
While cutting the current full-year growth forecast to 5 percent from 6.1 percent seen in October, the Central Bank said the October inflation at 4.6 percent was "much higher than expected", breaching its 4 percent medium target for the first time in over a year.
The committee also made a decision to continue with the "accommodative" stance "as long as it is necessary to revive growth, while ensuring that inflation remains within the target". "However, given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture", the committee said in a statement.
Das said the pause was temporary and the central bank wanted to assess the effect of its policy after reduction of 135 basis points in five policies this year. The central bank said it'll continue with its "accommodative" stance. "The median term deposit rate has declined by 47 bps during February-November 2019".
The RBI lowered its gross domestic product (GDP) growth forecast for the year ending March 2020 to 5 percent from 6.1 percent, while raising its headline inflation projection for the second half of the ongoing financial year to between 5.1 percent and 4.9 percent, from an earlier forecast of 3.5 percent to 3.7 percent.
However, some buying towards the fag end of the session led to the index settling at 40779.59, which was 70.70 points, or 0.17 per cent, lower than the previous close.
The Organization for Economic Cooperation and Development (OECD) forecast a modest recovery for India Thursday, predicting annual growth of 6.2 percent in 2020, but warned further reforms were needed. "This augurs well for transmission to lending rates, going forward", it added.
Even in earlier monetary policy regimes, stakeholders cribbed about RBI being unduly hawkish in setting repo rates.