The Reserve Bank of India (RBI) reduced its key repo rate by 25 basis points to 6.25%, the first cut since May 2020.
- The move aims to stimulate the sluggish economy, which is projected to grow at its slowest pace in four years.
- Monetary Policy Committee (MPC) – The six-member panel (three RBI officials, three external members) voted unanimously for the rate cut while maintaining a neutral policy stance.
- India’s economy is expected to grow 6.4% this fiscal year, below initial projections, with weaker manufacturing and corporate investment weighing on growth. Next year’s growth is forecast in the 6.3%-6.8% range.
- Inflation Trends – Retail inflation remains above the 4% target but eased to a four-month low of 5.22% in December, creating room for rate easing.
This article was written by Eamonn Sheridan at www.forexlive.com.
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