India keeps interest rates unchanged as inflation continues to decline
Published on: December 9, 2023.
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India’s Central Bank Leaves Interest Rates Unchanged, Citing Stable Economic Outlook
India’s central bank, the Reserve Bank of India (RBI), has announced that it will maintain the benchmark repo rate at 6.50 percent. The decision comes as the bank evaluates the country’s economic conditions, taking into account easing inflation and a stable financial outlook.
RBI Governor Shaktikanta Das highlighted the resilience of the Indian economy during a press conference, stating that the country’s fundamentals remain strong. Inflation, which reached 7.4 percent in July, has now decreased to 5 percent. The RBI has also revised its GDP growth forecast for 2023-24, raising it to 7 percent from the previous estimate of 6.5 percent.
According to the World Bank, India is expected to be one of the world’s fastest-growing economies, with robust domestic demand and investment helping to mitigate the impact of inflation and global challenges. In fact, India surpassed Britain last year to become the fifth-largest economy globally and achieved faster-than-expected growth of 7.6 percent for the quarter ending in September.
Over the past year, India has faced various external pressures, including tightening financial conditions and the repercussions of the conflict in Ukraine on global food and oil markets. Additionally, the country has experienced a rise in extreme weather events, which scientists attribute to climate change.
The prices of essential food items such as wheat, rice, and tomatoes saw significant increases earlier this year due to factors like floods, soaring temperatures, and pest attacks in agricultural regions. As a result, the government introduced restrictions on rice exports to alleviate the pressure on food prices.
Overall, the RBI’s decision to maintain interest rates reflects optimism in the Indian economy. It acknowledges the positive strides made in managing inflation and showcases the country’s resilience in the face of global economic challenges.
Source: [Dawn](https://www.dawn.com){:target=”_blank”}
