RBI Shifts Focus to Economic Growth

In a recent monetary policy committee (MPC) meeting, RBI Governor Sanjay Malhotra highlighted the current economic conditions as ripe for policy easing. With inflation near the 4% target and growth remaining moderate, the focus has shifted towards bolstering domestic demand to sustain economic momentum.

Unanimous Decision for Rate Cut

The MPC unanimously decided to lower the policy rate by 25 basis points, adopting an accommodative stance. This move underscores the central bank's confidence in managing inflation while prioritizing economic growth.

External Risks and Domestic Priorities

Malhotra pointed out the dual implications of global tariffs on inflation, balancing between potential currency pressures and the softening of commodity prices. The RBI's strategy reflects a careful consideration of external risks versus domestic economic needs.

Supporting Private Consumption and Investment

MPC member Nagesh Kumar emphasized the importance of stimulating private consumption and investment, especially amidst global uncertainties. The recent inflation decline offers room for a more accommodative monetary policy.

Resilience Amid Global Trade Disruptions

Saugata Bhattacharya acknowledged the challenges posed by global trade disruptions but highlighted the resilience of India's domestic economy. The RBI's liquidity measures are expected to facilitate the transmission of interest rate adjustments.