At its latest meeting on 25 January, the Reserve Bank of India (RBI) increased interest rates by 25 basis points, pushing the repo rate to 6.50%. The decision was widely expected by the market, as wholesale price inflation had spiked to 8.4% in December, amid higher food prices. Moreover, the decision continued the policy tightening cycle that has entailed a cumulative increase of 175 basis points in the repo rate since March 2010. The RBI reaffirmed that inflation, which remains ?unacceptably high?, was its main concern, and recent surges in prices for food and fuel were showing signs of filtering into generalised inflation. In the same vein, the Bank acknowledged both demand and supply side price pressures were rising. Moreover, higher commodity prices in global markets are placing additional pressure on inflation on the supply side. On the other hand, the RBI stated that demand-side pressures were visible in the medium term, as the economy maintains its strong growth momentum led by the domestic sector.
India Monetary Policy
Central Bank raises interest rates
February 25, 2011
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India Economic News
October 17, 2016
Recently-released data related to India’s external sector showed that the trade deficit totaled USD 8.3 billion in September, which was a smaller shortfall than the USD 10.2 billion gap recorded in September 2015 (August 2016: USD 7.7 billion deficit).
October 15, 2016
In September, consumer prices fell 0.23% from the previous month, which followed August’s flat growth.
October 12, 2016
The fall in industrial production moderated in August, after recording the largest contraction since November 2015 in July.
October 5, 2016
Activity in India’s manufacturing sector lost steam in September.
October 4, 2016
The newly facelifted Reserve Bank of India (RBI) decided to ease monetary policy at a scheduled meeting on 4 October, cutting the repurchase rate from 6.50% to 6.25%—an over five-year low.