Page 28 - The Indian EYE 041423

BUSINESS EYE APRIL 14, 2023 | The Indian Eye 28

Low inflation & more growth

No change in repo rate as

RBI predicts GDP growth of 6.5%

Retail inflation had again been staying above the RBI’s tolerance limit of 6 per cent for two consecutive months
since January. In February, India’s retail inflation stood at 6.44 per cent, while in January, it was at 6.52 per cent

OUR BUREAU
Mumbai

n a huge development on Thurs-
day, the Reserve Bank of India
I(RBI) made a surprise decision
of keeping the repo rate unchanged.
As a result, BSE Sensex went up 143
points to settle at 59,832.97 while
NSE Nifty surged 42 points to end at
17,599.15 on Thursday. Among the
sectoral indices, realty rose almost 3
per cent. Energy, Pharma, Auto and
Metal were among the gainers with
less than a per cent jump. IT strug-
gled as it shed 0.7 per cent. FMCG
and Consumer Durable also ended in
the red.
Adani Enterprises’ shares
jumped 3.22 per cent on Thursday.
State Bank of India, IndusInd Bank,
Mahindra and Mahindra, Tata Mo-
tors and Sun Pharma were among Reserve Bank of India (RBI) Governor Shaktikanta Das addresses a press conference announcing
the top gaining stocks today.
The Reserve Bank of India on the central bank’s monetary policy statement in Mumbai on Thursday (ANI)
Thursday decided to keep the key
benchmark interest rate - the repo at 5.9 per cent. RBI’s governor said, monetary policy in the recent peri- financial conditions evolved in line
rate - unchanged at 6.5 per cent with “Our job is not yet finished and the od has aimed for a non-disruptive with the productive requirements of
readiness to act should the situation so war against inflation has to continue normalization from the pandem- the economy.”
warrant. The Monetary Policy Com- until we see a durable decline in in- ic era stimulus measures. Even as The governor said, “Inflation
mittee of the central bank decided to flation closer to the target.” monetary policy moved decisively to has softened from its elevated levels
take a pause after a rate hike seen in Shaktikanta Das said, “Our the withdrawal of accommodation, a year ago; however, it still remains
the previous six consecutive policies. above the upper tolerance band.”
Raising interest rates is a mon- INDUSTRY SPEAK Retail inflation had again been
etary policy instrument that typically “The pause in policy repo rate by RBI is a welcome move given the staying above the RBI’s tolerance
helps suppress demand in the econo- evolving macro-economic and financial markets scenario. The renewed limit of 6 per cent for two consecu-
my, thereby helping the inflation rate phase of turbulence that Central Banks are grappling with globally given tive months since January. In Febru-
decline. developments in the banking sector, geopolitics and slowdown in growth ary, India’s retail inflation stood at
After the three-day deliberations 6.44 per cent, while in January, it was
of the Monetary Policy Committee and trade flows warranted a prudent response RBI has delivered” -- at 6.52 per cent.
Subhrakant Panda, President, FICCI
of the Reserve Bank of India, Gov- “RBI’s decision to hike the rate was in consonance with the expec- India’s retail inflation was above
ernor Shaktikanta Das on Thursday tations. Continuing strong job data from Fed has made monetary policy- RBI’s 6 per cent target for three con-
said the central bank has projected secutive quarters and had managed
India’s real GDP growth for 2023-24 making a delicate balancing act for emerging economies’ central banks” to fall back to the RBI’s comfort
-- Dinesh Khara, Chairman, State Bank of India
at 6.5 per cent. “The underlying question - Are we done with the rate hikes? Continu- zone only in November 2022.
During his speech, the governor According to Shaktikanta Das,
said that RBI projected GDP growth ing with the ‘withdrawal of accommodation’ stance, could provide elbow projections for 2023-24 point to a
in FY24’s first quarter (Q1) at 7.8 per room to take one more rate hike later which would be data-dependent, softening in inflation, though the dis-
forward growth-inflation dynamics and upside risks to food inflation... Af-
cent; the second quarter (Q2) at 6.2 ter raising the repo rate by 250 bps, RBI seems to have adopted a wait- inflation is likely to be gradual and
per cent; the third quarter (Q3) at 6.1 and-watch approach” -- Dhiraj Relli, MD and CEO, HDFC Securities protracted, given the rigidity in core
per cent; and the fourth quarter (Q4) or underlying inflation pressures.

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