India Central Bank has maintained a key interest rate at the seventh politics meeting in a row on Friday, because the economy's growth is expected to remain solid, while inflation remains above the target 4%.
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The header inflation of India has fallen year -on -year through the third one in a row to 4.31%, providing more space for monetary alleviation after lowering the central bank rates in the country for the first time In almost five years last week.
Reading in January was the lowest since August 2024 and was below expectations of 4.6% from economists surveyed by Reuters.
The decrease in inflation may explain the next reduction of the rate by the India Bank, which reduced the repo rate of 6.25% from 6.5% on Friday to increase the slowdown of the economy.
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RBI is currently in the face of a dilemma, because it strives to support growth in the third largest Asia economy, but the reduction of the rate aimed at stimulating growth can weaken the rupe, which reached a record part at the beginning of this month and was under pressure due to a stronger dollar.
Indian currency, however, has strengthened in the last two days, apparently Due to intervention by a central bank.
Said the governor of RBI Sanjay Malhotra in his statement that the decision to lower the feet was due to the decrease in inflation, which is to continue to moderate in 2025 and 2026 in relation to the bank's goal of 4%.
Year -round increase in the ending year It is expected to be 6.4%, according to government estimates, much lower than 8.2% a year earlier. RBI also reduced its growth forecast for the current financial year to 6.4% – corresponding to the government's perspectives. The bank brought an increase of 6.6% in previous estimates.
“These dynamics of growth inflation open a policy space for MPC (currency policy committee) to support growth, while remaining focused on adapting inflation to the goal,” said the Central Bank on Friday.