Page 32 - The Indian EYE 041224

BUSINESS EYE APRIL 12, 2024 | The Indian Eye 32

HIGH GROWTH & LOW INFLATION

RBI monetary policy boosts

industry confidence

OUR BUREAU

New Delhi/Mumbai
n a major policy decision, unveiling the deci-
sions of the first monetary policy committee
Imeeting of FY25, RBI Governor Shaktikanta
Das emphasized the significance of keeping the
elephant in the forest while stating that the CPI
inflation projections for FY25 has been reduced to
4.5 per cent from earlier 4.7 per cent.
The governor said when CPI inflation had
peaked at 7.8 per cent in April 2022, the elephant
in the room was inflation. “The elephant in the
room was CPI inflation. The elephant has now
gone out the elephant has now gone out for a walk,
and appears to be returning to the forest,” Das said.
“Assuming a normal monsoon, CPI inflation
for 2024-25 is projected at 4.5 per cent with Q1 at
4.9 per cent; Q2 at 3.8 per cent; Q3 at 4.6 per cent;
and Q4 at 4.5 per cent. The risks are evenly bal-
anced,” said Das.
Inflation has come down significantly, but re-
mains above the 4 per cent target, according to the
RBI Governor. The deflation in fuel is likely to
deepen in the near term, following the cut in LPG RBI Governor Shaktikanta Das addressing a press conference regarding the monetary policy decisions
prices in March and a normal monsoon this year.
The inflation in India has eased to 5.1 per cent in Mumbai on Friday (ANI)
in January and February 2024 from 5.7 per cent
in the December 2023. The inflation has peaked Indian benchmark indices Nifty and Sensex the MPC wary. Accordingly, we do not see much
during December. RBI Governor said remained flat following the Reserve Bank of In- scope for any rate easing until Q2FY25. Earliest
“Growth has continued to sustain its momen- dia’s decision to maintain the repo rate at 6.5 pc possibility of rate easing can emerge in Q3 FY 25.”
tum, surpassing all projections. Headline inflation for the seventh consecutive policy meeting. “Inves- Anuj Puri, Chairman, ANAROCK Group said
has eased to 5.1 per cent during both January and tors are closely monitoring the U.S. non-farm pay- no change in rate will boost the real estate sector.
February, and this has come down to 5.1 per cent roll numbers for March, expecting a rise of 200,000 “The Indian economy is going strong and inflation
in these two months from the earlier peak of 5.7 jobs, with the unemployment rate likely to remain is reined in, though it has yet to come within the
per cent in December... Looking ahead, robust steady at 3.9%. U.S. stock index futures recovered threshold of RBI’s target. The decision to main-
growth prospects provide the policy space to re- slightly after a decline on Thursday, driven by tain status quo will keep the ongoing residential
main focused on inflation and ensure its descent to hawkish Fed comments and Middle East tensions,” real estate sales momentum on course and unim-
the target of 4 per cent.” says Varun Aggarwal, founder Profit Idea. peded. Aspiring homebuyers eyeing a purchase
RBI Governor said that the Current Account Industry leaders have hailed the Reserve Bank will proceed with confidence.”
Deficit of India has also narrowed significantly. of India decision to maintain repo-rate at the cur- Anu Aggarwal, President & Head Corporate
India’s merchandise and services exports have rent level. While acknowledging the strides made, Banking, Kotak Mahindra Bank said, “The mon-
grown significantly. The Forex reserve of India has industry leaders underscored the need for contin- etary policy stance announced today reflects that
reached an all-time high with a forex reserve of ued vigilance amidst lingering challenges such as the RBI is evenly balancing the two divergent ob-
645.6 billion dollars. The Net FPI inflow to India inflationary pressures and global uncertainties and jectives of growth and inflation. It seems a case of
stands at 41.6 billion dollars emphasized the importance of ongoing policy ad- full commitment to growth with even higher com-
Further RBI Governor added that the Global justments to navigate such challenges effectively. mitment to inflation targets. I hope we will see sus-
economy is resilient with stable outlook and the Upasna Bhardwaj, Chief Economist, Kotak tained growth and softened inflation.”
Global trade is expected to grow faster in the com- Mahindra Bank said, “While low core inflation The policy has given a positive outlook for
ing months. The global equity markets also gained provides comfort, the uncertainty on food infla- Current Account Deficit. It says CAD has nar-
while the dollar and the bond market is volatile. tion remains a worry. Further, the higher US yields, rowed significantly, merchandise and services ex-
Expecting positive growth in 2024 he further said higher oil prices and other commodities along with ports have grown significantly and Forex reserve is
that the global trade is going to improve in 2024. possible delay in Fed’s rate easing cycle will keep at an all-time high of 645.6 billion dollars.

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