Steadfast RBI Maintains Prudent Stance, Projects 7% Growth Amidst Inflation Challenges
In a move reflective of its commitment to price stability, the Reserve Bank of India (RBI) opted to maintain the policy rate at 6.5 per cent for the fifth consecutive time, signalling a prudent stance amidst ongoing inflationary concerns. The decision comes after a pause in the rate increase cycle initiated in April, which saw six successive hikes totalling 250 basis points since May 2022.
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RBI Holds Rates: Growth Up
RBI Governor Shaktikanta Das, in announcing the bi-monthly monetary policy, emphasized the Monetary Policy Committee’s unanimous decision to hold the repo rate steady at 6.5 per cent. Stressing an “actively disinflationary” approach, Das highlighted an upward revision in the growth projection to 7 per cent for the current fiscal year, up from the earlier estimate of 6.5 per cent.
Against the backdrop of inflation easing to 4.87 per cent in October, the Central Bank anticipates the Consumer Price Index-based retail inflation to hover around 5.4 per cent for the current fiscal. As the MPC remains vigilant, the government’s directive for the RBI to maintain CPI inflation at 4 per cent with a 2 per cent margin on either side underscores the collective commitment to balancing economic growth with inflationary pressures.
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