On Friday, December 6, the central bank of India, as previously expected, decided to keep the benchmark interest rate at 6.5%.
The mentioned decision is related to the efforts of the financial regulator of the specified South Asian country to contain the growth of inflation and at the same time not cause damage to the economic growth. It is worth noting that India’s economic system is currently the third largest in Asia.
The decision to keep the cost of borrowing at the same level corresponds to the preliminary forecasts of experts who were interviewed by the media.
In October, consumer price inflation in the South Asian country showed an increase, reaching 6.21%, which is a 14-month high. It is worth noting that this indicator significantly exceeds the target of the central bank of India at 4%. Also, the mentioned figure is higher than the tolerance ceiling of the financial regulator of the South Asian country at 6%.
Reserve Bank of India governor Shaktikanta Das said that the outlook for economic growth for the 2025 fiscal year has been revised. Currently, the financial regulator of the South Asian country expects that the corresponding indicator will be fixed at 6.6%. It is worth noting that back in October, the central bank of India projected economic growth in the 2025 fiscal year to be 7.2%. The financial regulator of the South Asian country also noted that the slowdown in the domestic economy had bottomed out in the September quarter. During the mentioned period, India’s economic growth was 5.4% year-on-year. At the same time, analysts interviewed by the media predicted that the pace of the corresponding upward dynamic would be fixed at 6.5%.
