Reserve Bank of India Tightens Again
February 8, 2023
At the Reserve Bank of India, the repo rate has been increased by 25 basis points to 6.5%. Prior to the pandemic’s onset, the rate had been 5.15% at the end of 2019 but was cut to 4.0% by May 2020 where it stood for two years until the current tightening cycle began in May 2022. Today’s rate is the seventh one so far but is unlikely to be the last, according to a released statement: “the MPC is of the view that further calibrated monetary policy action is warranted to keep inflation expectations anchored, break core inflation persistence and thereby strengthen medium-term growth prospects.” The deceleration of CPI inflation from 7.4% last September to 5.7% in December mainly reflects vegetable price disinflation, and core inflation of 6.1% is still twice the target range midpoint. Indian economic growth has been resilient and is outpacing China’s rate of expansion.
Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Reserve Bank of India
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