The recent monetary policy decision clearly emphasised on withdrawal of accommodation while supporting growth. Discuss (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 2 years
KEY POINTS
· Monetary Policy Committee (MPC) unanimously approved a 50-bps repo-rate hike, taking it to 5.4%, the steepest in recent times.
· With the average inflation figure hovering around an ‘uncomfortable’ 6.8% mark, the policy clearly focuses on steps to bring inflation below 6%, the upper limit of the Reserve Bank of India’s (RBI’s) tolerance band.
· Besides inflation, the design of RBI’s monetary policy has been influenced by global factors, including geo-political forces, financial market volatilities, energy and commodity prices and local factors of widening CAD and currency volatility due to higher imports and capital outflows.
· The Indian economy is expected to grow faster than its Asian peers and even other global economies.
· Bank credit has demonstrated strong growth, particularly with higher consumption and manufacturing activity.
· Urban consumption has ranged from stable to strong across segments including contact-intensive services, which have rebounded significantly.
· Considering all these factors, the MPC will be focused on controlling inflation while keeping the flexibility to provide liquidity and take measures when needed to support growth.
· Any further decline in commodity prices augurs favourably for domestic businesses and consumers.
· However, the worsening global outlook and rising uncertainty can take a toll on India’s exports and private sector capex, respectively.
K. V. A 2 years
Kindly review
IAS Parliament 2 years
Good attempt. Keep Writing.
Vignesh 2 years
kindly review sir.
IAS Parliament 2 years
Good attempt. Keep Writing.
