Monetary Policy Adjustments Amid Global Uncertainties

The Reserve Bank of India's Monetary Policy Committee, headed by Governor Sanjay Malhotra, reduced the lending rate by 25 basis points to boost growth amid global uncertainties and a moderate domestic economic outlook. The RBI emphasizes an 'accommodative' stance while monitoring inflation and growth trajectories.

The Reserve Bank of India's Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra, reduced the short-term lending rate by 25 basis points to 6% on April 9, reflecting concerns about the recovering domestic economy and global uncertainties. This change aligns with a shift to an 'accommodative' monetary stance from 'neutral'.

Governor Malhotra emphasized the need to bolster private consumption and support private corporate investments, citing the importance of nurturing domestic demand amid a moderate growth environment. He underlined the global uncertainties that necessitate vigilance and swift policy responses to balance growth and inflation risks.

Deputy Governor M Rajeshwar Rao and Executive Director Rajiv Ranjan noted the need for policy support to sustain growth potential amidst a benign inflation outlook. Discussions also addressed safeguarding domestic industries from foreign competition and securing market access through timely trade negotiations.

(With inputs from agencies.)