The Reserve Bank of India (RBI) has indirectly eased policy rates through consistent liquidity injections, leading to a decline in the weighted average call rate (WACR) towards the benchmark repo rate. This trend reflects increased confidence in liquidity management strategies, supported by government spending and proactive RBI operations. Analysts suggest a shift towards containing inflation while maintaining stable borrowing costs.
Jayanth Varma, the dissenting member of the Reserve Bank of India s policy committee, argued that high interest rates impede investments and called for a shift in the policy stance. Shashanka Bhide emphasised the importance of focusing on the inflation target for supporting growth.
Jayanth Varma, an external member of the Monetary Policy Committee (MPC), believes that the current phase of high inflation in India will be limited to a few months as monetary policy is tight enough to prevent food price shocks from causing broader price pressures. However, he also highlights the risk of slower global growth impacting India s economy.
The Reserve Bank of India (RBI) kept its key lending rate unchanged for the third consecutive time, as it continued to monitor inflation closely. In a bi-monthly monetary policy announcement today, RBI Governor Shaktikanta Das said that the Monetary Policy Committee (MPC) has unanimously decided to maintain the repo rate at 6.5%.