Amidst tariff tensions and global uncertainties, the RBI has adopted a cautious stance. Governor Sanjay Malhotra stated that the growth rate is stable and inflation is currently favorable due to softening food prices, but a slight increase is possible in the coming months. The MPC decided to keep the repo rate unchanged at 5.5%.
New Delhi: The Reserve Bank of India (RBI) has maintained a stable monetary policy, exercising caution amidst global economic challenges and geopolitical tensions. At the MPC meeting held from August 4th to 6th, all six members supported keeping the repo rate at 5.5%. Governor Sanjay Malhotra said that the economy is b and stable, although tariffs and international instability could put pressure on inflation and growth in the future.
Stable Growth Rate and Inflation Scenario
Governor Malhotra stated that India's growth rate remains stable at present. The recent softening of food prices has helped control inflation to some extent. This has provided relief to both consumers and the market. However, he cautioned that a slight increase in inflation could be seen in the coming months.
He said that volatility in global markets and tariff-related issues could pose a challenge for India. Fluctuations in the prices of oil and raw materials at the international level could affect domestic inflation. In such a situation, the central bank is constantly monitoring these situations.
MPC's Decision on Repo Rate
The Monetary Policy Committee meeting was held earlier this month between August 4th and 6th. In this, all six members unanimously decided that the repo rate should be maintained at 5.5 percent. This is the third consecutive time that the committee has not changed policy rates.
The Governor said that in the current situation, it is necessary to keep interest rates stable so that a balance can be maintained between the growth rate and inflation. If stability comes in global conditions, the policy can be reconsidered in the coming months.
Indian Economy Remains Strong
Other members of the MPC also said that there is no need for any change in policy rates in the current situation. Deputy Governor Poonam Gupta said that domestic demand, government policies and the current global scenario indicate that there is currently no scope for further cuts.
RBI Executive Director Rajiv Ranjan said that the Indian economy is still in a b position. Increase in government spending, demand in rural areas and strength of the service sector are supporting the growth rate. However, he admitted that some fluctuations are being seen in the industrial sector.
Monitoring Global Conditions
Governor Malhotra clarified that geopolitical tensions and tariff-related situations at the global level could pose risks to the Indian economy. Uncertainty in international trade can affect exports and investment. For this reason, the central bank is adhering to a policy of caution.
He said that there are also opportunities in front of India's economy. Domestic demand is continuously strengthening and new sectors are growing rapidly due to the expansion of digital services. In such a situation, India can play an important role in the global economic scenario in the coming times.
