The Reserve Bank of India (RBI) should change its monetary policy stance to neutral from its current stance of withdrawal of accommodation, said R Dinesh, the president of Confederation of Indian Industry (CII).
Expecting the Consumer Price Index (CPI) inflation to moderate this fiscal due to a reduction in fuel and core inflation along with RBI’s decision to raise key repo rate by a cumulative 250 basis points in the last fiscal, Dinesh also recommended the RBI to continue with a pause in the key repo-rate.
The RBI’s rate-setting panel held the benchmark interest rate steady at 6.5 percent in April after hiking it by 250 basis points since May 2022. Retail inflation eased to an 18-month low in April. Still, the RBI has been stressing that its latest pause is not a pivot to rate cuts.
“The global monetary policy is still settling down because the inflationary conditions are fast evolving and all central banks are watching it,” Governor Shashikanta Das at CII’s annual session on May 24 had said.
While some central banks have hit a pause on rate hikes in recent meetings, Das pointed out that the Bank of New Zealand had raised interest rates by 25 basis points earlier on Wednesday, while Canada — which had paused hikes — opted to increase rates again recently.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
