The interest charged on loans is the most important price in an economy. And its rate is nudged up and down by the lender of last resort—the Reserve Bank of India (RBI) in our case—for good reason. It helps keep the economy’s growth path stable. Inflation held on a tight rein, RBI’s explicit mandate since…
In December, the MPC opted to play safe. It maintained a status quo on rates (by a 4:2 majority) and stance on the grounds that the beast of inflation, though slain, had not been destroyed, and growth, though slowing, remains resilient. Two months later, the MPC, with a new governor at the helm, seems to…
The backdrop of the monetary policy committee (MPC) meeting later this week is a complex one. Growth momentum has slowed in 2024-25. Headline retail inflation is still high despite softening from the recent peak. The government maintained strong fiscal discipline, despite offering tax concessions towards boosting private consumption, reflecting a decelerating expenditure budget. Importantly, this…
For decades, India’s salaried class viewed themselves as a minority—sandwiched between the elite and what they believe is the world’s largest population of the “politically pampered”. And in most Budgets, they found the discourse to be dominated by farmers, the poor, women and other groups. Which is why the record â‚ą1 trillion largesse showered by…
With a new governor at the helm, the Reserve Bank of India’s (RBI’s) monetary policy stance will be watched very closely this time. If RBI signals a shift to an easy-money policy, it will ease concerns relating to the growth slowdown. But it will raise concerns about inflation at a time when a weak rupee…
Mumbai: After finance minister Nirmala Sitharaman delivered a consumption-supporting budget, the ball is now in the Reserve Bank of India’s (RBI) court to deliver the last-mile push to growth with a rate cut next week. A majority of economists believe that the budget has set the stage for a rate cut by keeping fiscal deficit…
There is more than one way to skin a cat,” goes an old English proverb, which means that there are many ways to accomplish the same task. In central bank-speak, the equivalent would perhaps be: “There is more than one way to effect a soft-landing,” that holy grail of central banks the world over. For,…
Globally, monetary policy is at an interesting crossroads. In contrast to rising interest rates during 2022 and 2023, central banks of several developed and emerging economies have lowered policy rates of late (e.g., UK, euro zone, Canada, Sweden, Switzerland, China, Brazil), some have even hiked (e.g., Japan, Russia, Indonesia, Egypt), while a large number of…
