Mumbai, April 8 Reserve Bank Governor Sanjay Malhotra on Wednesday termed the ceasefire between the US and Iran as "pleasant news," which was taken into account while making the policy decision hours later.
"At 5:30 am, we received some pleasant news, perhaps not entirely unexpected," Malhotra told reporters at the customary post-policy-review interaction.
"The ceasefire has been taken into account, to some extent. The full implications (will emerge later), but the ceasefire has been factored into the monetary policy decision," he added.
Although it was a scheduled review, the maiden policy review for FY27 by the Reserve Bank is the first such decision taken by any central bank in the world after the ceasefire announcement.
Concerns have persisted over the last 39 days of the conflict in West Asia, triggered by the US and Israel's joint attacks on Iran, and the Gulf country's response to the crisis.
Malhotra said the six-member rate-setting panel, headed by him, meets before announcing the decision to the wider public at 10 am.
The central bank's six-member Monetary Policy Committee voted unanimously to keep the benchmark repurchase rate unchanged at 5.25 per cent, citing heightened uncertainty after the West Asia conflict drove crude prices sharply higher, weakened the rupee, and disrupted trade flows.
During the press conference, Malhotra also mentioned the upheaval in the financial markets, supply chain disruptions, and the impact on economic activity as something that was "almost a crisis".
Borrowing the old adage of never letting a crisis go to waste, Malhotra recommended a range of structural aspects beyond the short-lived turbulence, which we need to focus on going forward.
This includes accelerating the adoption of electric vehicles and increasing self-sufficiency in oil to reduce import burdens, he said.