RBI Governor on Monetary Policy: The Reserve Bank of India (RBI) has taken a cautious stance amidst the global economic conditions due to tariffs and Bhurajnic stress. RBI Governor Sanjay Malhotra said that the central bank needs to move forward very carefully in the current scenario. In the meeting of the Monetary Policy Committee (MPC) held from August 4 to 6 earlier this month, all six members voted in favor of keeping the major policy rate repo rate to 5.5%.

In the details of the meeting released on Wednesday, Governor Malhotra said, “Overall our economy presents a picture of strength, stability and opportunity. India’s strong economic status, policies promoting development and visionary strategy keeps the country in a strong position.”

Ever watching inflation

The governor said that the growth rate remains stable and the softening of food prices is currently looking favorable. However, he warned that a slight increase in inflation is possible in the coming months. He also said that fee and instability in the international market can pose risk in future.

Focus on economy growth

Other members of the MPC also did not explain the need for changes in rates in the present situation. Deputy Governor Poonam Gupta said that in view of the domestic economy and global situation, there is no more scope for further cuts in policy rates. Rajiv Ranjan, Executive Director, said that the Indian economy is still strong. Government spending, rural demand and strength of service sector remain its support, although there are some ups and downs in the industry.

It is clear that RBI is currently maintaining a policy of vigilance keeping an eye on inflation and global uncertainties. If the global conditions remain stable in the coming months, then the possibility of change in monetary policy can be reconsidered.

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