Taking guard: The Hindu editorial on the RBI and growth concerns
In a 5:1 majority verdict, the Reserve Bank of India’s Monetary Policy Committee (MPC), last week, decided to hold benchmark interest rate at 6.50%, the same level it has been since April 2023. One of the three newly inducted external members in the panel pushed for a 25 basis points (0.25 percentage points) rate cut, perhaps citing the decline in the headline inflation rate below the RBI’s median target of 4% in July and August. However, the MPC termed this downward trajectory of inflation as slow and uneven, and expected this moderation to reverse from September, as it has, to hit a nine-month high of 5.5%. The panel has not altered its 4.5% projection for retail inflation and its GDP growth estimate of 7.2% through 2024-25, but has reworked the math. In the second quarter or Q2, it expe...