Repo rate steady at 5.25%; RBI flags Hormuz disruptions, energy risks
India’s central bank has kept borrowing costs steady while signalling caution on global risks, even as domestic demand and services activity continue to support economic momentum.
India’s central bank has kept borrowing costs steady while signalling caution on global risks, even as domestic demand and services activity continue to support economic momentum.
The Reserve bank of India (RBI), in an article in August Bulletin, said the monetary policy needs to take a cautious approach if food inflation persists, as such shocks may not be transitory and could spill over into generalised inflation.
The decision to leave interest rates unchanged and the subsequent remarks from Fed Chairman Jerome Powell have sparked a sea change in market sentiment.
Moody's Investors Service expects global growth to continue to slow in 2023 over a cumulative monetary policy tightening by various central banks.
The central bank Governor cleared the air that another interest rate hike is imminent. The two-day monetary policy meeting in the US will start on September 20.
As per the newly effective interest rates, FDs between 7-45 days will get receive 4 per cent instead of 4.5 per cent earlier.
This is the third consecutive year that the government has revised its fiscal deficit target.
The Reserve Bank of India (RBI) also pegged country’s GDP growth for 2020-21 at 6 per cent.
Among the most important fiscal measures the government has taken so far is the cut in corporate taxes, apart from a host of sectoral measures.
The higher inflation last month comes in the backdrop of rising global crude oil prices which have been ruling at over $75 a barrel.
