RBI looks to tackle growth over inflation
In its first monetary policy meeting, the RBI said that all of the monetary policy committee's members had voted in favour of the repo rate cut that was announced earlier this month. The main target for the action was to help boost India's growth. RBI's Governor Urjit Patel also stated that India's inflation target of 5% for Q4 can be achieved, despite other risks.
Reserve Bank of India
The Reserve Bank of India forms as the apex and central institution that governs the country's money supply and monetary policies. Established nearly 81 years ago, the central bank is currently headquartered in Mumbai. Urjit Patel presently serves as the Governor, after taking over the reins from Raghuram Rajan, who stepped down last month. The RBI has massive reserves, amounting to nearly $363 billion.
RBI cuts repo rate to 6.25%
Earlier this month, the new Governor and his monetary policy committee announced a cut in interest rates by 25 basis points. The repo rate, or the rate at which the central bank lends to other commercial banks, was lowered to 6.25% The policy committee, consisting of 6 members, said the move was taken to to help revive credit to some of the productive sectors.
RBI's outlook for India
"The momentum of growth is expected to quicken with a normal monsoon raising agricultural growth and rural demand, as well as by the stimulus to the urban consumption spending from the pay commission's award," the RBI said.
RBI's stance on global growth
"Global growth has been slowing more than anticipated through 2016 so far, with weak investment and trade damping aggregate demand. Meanwhile, risks in the form of Brexit, banking stress in Europe, rebalancing of debt-fuelled growth in China have slanted the outlook to the downside."- RBI
RBI's meeting sees fall in retail inflation
Statistics showed that India's retail inflation dipped to 5.05% before decreasing further to touch 4.3% in September. While the committee members felt that there were risks to the 5% inflation target, it was also reported that they could be acceptable. The committee felt that some of the economic activities were showing signs of revival, and would require growth, thus creating room for cutting rates.