Despite concerns surrounding volatile food prices and fluctuating oil costs, the RBI maintains its inflation projection for the fiscal year at 5.4%. However, the elusive 4% target remains unmet, as RBI Governor Shaktikanta Das acknowledges the persistent dance of headline inflation.
Painting a broader picture, the anticipated GDP growth for FY24 stands at a robust 7%. The projected 6.5% and 6% growth for the third and fourth quarters, respectively, underscore the resilience of the Indian economy amidst uncertainties.
In a unanimous decision, the RBI’s Monetary Policy Committee elected to hold the repo rate steady at 6.5%. This cautious approach reflects the central bank’s focus on withdrawing accommodation while nurturing economic momentum. Yet, the path to achieving the elusive 4% inflation target remains uncharted.
Know: What is Repo Rate?
With accelerating GDP growth and manageable inflation, experts anticipate a continued pause in the key lending rate. This echoes the RBI’s stance in the last four bi-monthly reviews, signalling a stable monetary environment.
The last adjustment to the benchmark policy rate occurred in February, marking the conclusion of an interest rate hike cycle that began in May 2022. This period was significantly impacted by the global disruptions caused by the Russia-Ukraine conflict, contributing to elevated inflation in India.
In a moment of fiscal triumph, Governor Das announced a surge in India’s foreign exchange reserves, reaching a staggering $604 billion for the week ending December 1. This impressive figure reflects an increase of $2.54 billion from the previous week, solidifying India’s economic resilience in the face of various challenges.
Key takeaways for consumers
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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