RBI
Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that interest rate cuts will increase private expenses and also improve companies’ investment. He said this at the Monetary Policy Committee (MPC) meeting earlier this month. In this meeting, he and five other members of MPC supported the reduction of 0.25 percent in the interest rate (repo rate).
0.25 percent reduced repo rate
The MPC headed by Governor Malhotra on April 9 reduced the repo rate from 0.25 percent to 6 percent. The same cut was done in February. RBI informed the MPC meeting on Wednesday. It states that when consumer prices -based inflation is around 4 percent target and the economy is improving, monetary policy should support domestic demand so that development can gain momentum. Malhotra said in the meeting that this will increase private expenses and also improve the investment of companies. He also said that in view of the trends of inflation and development, monetary policy should be kept generous. The next meeting of MPC is to be held on 4-6 June 2025.
Global uncertainty are very high
RBI deputy governor and MPC member M Rajeshwar Rao said that at present there are very high global uncertainty, which require frequent vigilance and monitoring. He also said that policy steps should be taken immediately to deal with any threat to the balance of inflation and development. RBI Executive Director and MPC member Rajiv Ranjan said that Vikas is fine now, but it is less than our expectations and needs policy incentives among global challenges. The MPC consists of three external members appointed by the government, Nagesh Kumar, Saugat Bhattacharya and Ram Singh. According to the information, Kumar said that in order to save domestic industries, India needs to take appropriate steps to protect them from dumping of Chinese goods.
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