At its latest meeting on 16 December, the Reserve Bank of India (RBI) left interest rates unchanged in a decision broadly expected by the market. The move represented a temporary pause in the tightening cycle that saw six consecutive interest rate hikes, which pushed the repo rate to the current 6.25%. The next monetary policy meeting is scheduled for 25 January. At that meeting, the RBI is widely expected to raise interest rates, as most recent inflation data showed that food prices soared again in December. That said, Trade Minister Anand Sharma recently stated that rising interest rates may be an ineffective tool for fighting inflation in primary articles, especially vegetables. The Trade Minister suggested a selective restriction on credit to control rising inflation.
India Monetary Policy
Soaring food prices increase pressure to raise interest rates
January 19, 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.