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Policy Must Nurture Demand as Growth Is Still Moderate
Business Standard
|April 24, 2025
Policy stance was changed to accommodative this month
Members of the Reserve Bank of India's (RBI's) Monetary Policy Committee (MPC), which met on April 7-9, see inflation remaining benign. According to the minutes of the meeting released by the RBI on Wednesday, the policy needs to be supportive of growth.
The MPC decided to cut the policy repo rate by 25 basis points (bps) earlier this month, after reducing the rate by a similar amount in the February meeting. The stance of the policy was changed to accommodative from neutral in this month's meeting.
"When consumer price index (CPI)-based inflation is decisively around its target rate of 4 per cent and growth is still moderate and recovering, monetary policy needs to nurture domestic demand impulses to further increase the growth momentum," RBI governor Sanjay Malhotra said while citing the rationale for a rate cut.
He added that a rate cut will bolster private consumption and support a revival in private corporate investment activity.
This story is from the April 24, 2025 edition of Business Standard.
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