SME Times is powered by   
Search News
Just in:   • Adani Group to invest Rs 57,575 crore in Odisha  • 'Dollar Distancing' finally happening? Time for India to pitch Rupee as credible alternative: SBI Ecowrap  • 49% Indian startups now from tier 2, 3 cities: Jitendra Singh  • 'India ranks 3rd in global startup ecosystem & number of unicorns'  • LinkedIn lays off entire global events marketing team: Report 
Last updated: 11 Apr, 2023  

RBI.Thmb.jpg A fine balancing act by RBI

RBI.9.jpg
   Top Stories
» 28 Indian startups raised over $800 mn in funding this week
» GST Council waives interest, penalty on notices to taxpayers under Section 73
» India's innovation ecosystem poised for exponential growth: Industry
» India's innovation ecosystem poised for exponential growth: Industry
» Overseas Indians faith grows in Indian economy with $1 billion deposits in April
Bikky Khosla | 11 Apr, 2023

The Reserve Bank of India last week unanimously decided to leave the repo rate untouched. After a series of rate hikes, totalling 250 basis points since last May, the Monetary Policy Committee has now hit the pause button, against wide expectation by experts of a 25 basis points repo rate hike. For FY24, the inflation rate is predicted at 5.2 percent while GDP growth is estimated at 6.5 percent.

This is, no doubt, good news for exporters. The 2.5 percentage point rate hike since May 2022 has played havoc on borrowers. Interest rates for home-buyers has gone up sharply and for some the repayment period is now be stretched by many years. At macro level, high interest rate has been posing challenge to both consumption demand and private investment, raising doubt about future growth prospects of the economy.

The RBI decision seems wise. The central bank chief has clearly indicated that this was only a temporary pause. The World Bank recently, while cutting down India's 2023-24 growth forecast to 6.3%, raised concern over high credit risk and its impact on consumption and private investment. Additionally, the world economy is still facing headwinds, and in this scenario, the RBI wants to ensure that India’s growth momentum continues.

The central bank seems to be equally concerned about inflation. It has made it clear that further rate hikes are on the cards if inflation does not moderate to its comfort zone. Price stability is 'the best guarantee for sustainable growth', the RBI chief has added. Considering risks such as higher global crude and commodity prices and extreme weather conditions, this argument sounds balanced.

I invite your opinions.

 
Print the Page
Add to Favorite
 
Share this on :
 

Please comment on this story:
 
Subject :
Message:
(Maximum 1500 characters)  Characters left 1500
Your name:
 

 
  Customs Exchange Rates
Currency Import Export
US Dollar
66.20
64.50
UK Pound
87.50
84.65
Euro
78.25
75.65
Japanese Yen 58.85 56.85
As on 13 Aug, 2022
  Daily Poll
Will the Budget 2024 be MSME friendly
 Yes
 No
 Can't say
  Commented Stories
» GIC Re's revenue from obligatory cession threatened(1)
 
 
About Us  |   Advertise with Us  
  Useful Links  |   Terms and Conditions  |   Disclaimer  |   Contact Us  
Follow Us : Facebook Twitter