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RBI Governor Sanjay Malhotra targets ‘investor-friendly’ India: How will the rate cut impact sluggish growth?
Reserve Bank of India (RBI) Governor Sanjay Malhotra on Saturday said that the central bank is aiming to make India ‘investor-friendly,’ PTI reported. The Indian Rupee recovered after hitting all-time low following the RBI's MPC stance.
The Reserve Bank of India (RBI) Governor Sanjay Malhotra said on Saturday, February 8, that the central bank aims to make India more investor-friendly, and the rates cuts are set to support growth and consumption in the nation, PTI reported.
The central bank head also said that RBI is not worried about the day-to-day movement of the Indian Rupee, as the market forces decide the value of the currency, according to the report.
The currency hit its all-time low level at 87.59 against the US dollar on Thursday, February 6, but recovered after the Indian central bank decided to cut interest rates.
The Reserve Bank of India focuses on the medium to long-term outlook of the currency, Union Finance, Nirmala Sitharaman,
was quoted as saying by the news agency.
The Reserve Bank of India (RBI) on February 7 announced a 25-basis-points rate cut to 6.25 per cent, to fuel the growth engine, after five years.
Rupee's effect on Inflation
Sanjay Malhotra also said that a 5 per cent depreciation of the nation's currency has a 30-35 basis points impact on India's domestic inflation rate, as per the report.
In the latest Monetary Policy announcement on February 7, Malhotra announced that the central bank expects the inflation target for the financial year 2025-26 to be at 4.2 per cent, while retaining the FY2025 forecast at 4.8 per cent.
Mint reported, citing a government data release on January 13, that India's retail inflation eased to a four-month low in December. The Consumer Price Index (CPI) based on retail inflation rose 5.22 per cent in December, which is lower than the 5.48 per cent in November and 5.69 per cent a year ago. The lower inflation data was attributed to the slow increase in food prices.
Food inflation increased by 10.87 per cent in October, compared to 9.24 per cent in September and 5.66 per cent in August 2024.
The Governor also said that the Reserve Bank of India (RBI) considered the current rupee-dollar rate while working out growth and inflation projections for the upcoming financial year.
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Business NewsEconomyRBI Governor Sanjay Malhotra targets ‘investor-friendly’ India: How will the rate cut impact sluggish growth?
First Published:8 Feb 2025, 04:40 PM IST
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