India keeps interest rates unchanged as inflation decreases
Published on: December 10, 2023.
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India’s Central Bank Keeps Interest Rates Unchanged, Citing Stable Economic Outlook
In a press conference on Friday, the Reserve Bank of India (RBI) announced that it would maintain its benchmark repo rate at 6.50 per cent. The decision comes as the central bank seeks to tackle inflationary pressures and promote a stable financial environment. Despite a spike in inflation to 7.4% in July, the rate has now dropped to 5%, indicating a positive trend. RBI governor, Shaktikanta Das, expressed confidence in the Indian economy, stating that it “presents a picture of resilience” and that the fundamentals remain strong.
The RBI has revised its GDP growth forecast for 2023-24 to 7%, up from the previous estimate of 6.5%. This optimistic outlook is supported by the World Bank, which expects India to remain one of the world’s fastest-growing economies, fueled by robust domestic demand and investment. India surpassed the United Kingdom last year to become the fifth-largest economy globally and recorded impressive quarterly growth of 7.6% in the quarter ending in September.
India has faced various challenges on the global front, including tightening financial conditions and the impact of the Ukraine conflict on food and oil markets. Additionally, the country has been grappling with the consequences of climate change, such as extreme weather events. Floods, record-high temperatures, and pest attacks in production belts caused a significant increase in food staple prices earlier this year. In response, the government imposed restrictions on rice exports to alleviate the pressure on food prices.
As India continues to navigate these challenges, the RBI’s decision to maintain interest rates reflects a commitment to preserving stability in the economy. The central bank’s optimistic growth projections, coupled with the government’s measures to mitigate inflation, instill confidence in India’s economic resilience.
Source: [Dawn](https://www.dawn.com){:target=”_blank” rel=”nofollow”}
