Key Points
It is not often that central bankers put real interest rates at the heart of the monetary policy decision..
For the second straight meeting of the Monetary Policy Committee, members unanimously voted to keep interest rates unchanged, with the repo rate, the rate at which it lends to banks, at 6.5%...
While the action was on expected lines and the Governor listed out uncertainties from geopolitical developments to El Nino, there's comfort emerging that the interest rate cycle has peaked and the next move could be a cut in policy rates - whenever it happens...
"With the policy repo rate at 6.50% and full-year projected inflation for FY24 at just a little above 5%, the real policy rate continues to be positive," Das said.. Price Stability Mandate..
Inflation targeting as a monetary policy objective emerged in 2016 after years of price increases led to negative real interest rates, spawning financial instability when savers began to chase gold and real estate to ensure the value of their savings doesn't erode...
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