85 breached
The Indian rupee has breached the significant psychological barrier of 85 against the US dollar, marking an all-time low amid a confluence of domestic and global pressures.
The Reserve Bank of India (RBI) decided to keep the repo rates unchanged at the October Monetary Policy Committee meeting on Friday.
The three-day bi-monthly monetary policy committee (MPC) meeting, which began on Wednesday, decided to take a pause on rate hike for the fourth consecutive time this fiscal.
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“We have identified high inflation as a major risk to macroeconomic stability and sustainable growth. After detailed assessment of the evolving macroeconomic and financial developments and outlook it decided unanimously to keep the policy repo rate unchanged at 6.5 per cent. The SDF rate remains at 6.25 per cent and the MSF rate and bank rate at 6.7 per cent,” he announced.
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In its last three meetings in April, June, and August, the RBI kept the repo rate unchanged at 6.5 per cent.
“The overall inflation outlook is clouded by uncertainties by fall in kharif sowing, lower reserve oil levels and volatile global food and energy prices,” Governor said.
In contrast to global traits, domestic economic activity exhibits resilience on the back of strong domestic demand. Real GDP Growth for the current financial year is projected at 6.5 per cent with Q2 at 6.5 per cent, Q3 at 6 per cent and Q4 at 5.7 per cent, Governor said.
Real GDP growth for the first quarter of next financial year is projected at 6.6 per cent.
As evident from our survey there is further progress in anchoring of inflation expectations which entered single digit zone for the first time since Covid19 Pandemic, Governor said.
CPI Inflation for the current financial year is projected at 5.4 per cent which is same as projected earlier, with Q2 at 6.4 per cent, Q3 at 5.6 per cent and Q4 at 5.2 per cent, the risks are evenly balanced. Inflation for first quarter of next financial year is projected at 5.2 per cent.
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