Indian Economy Facing Problems Due To Global Instability Said RBI

Indian Economy Facing Problems Due To Global Instability Said RBI
Written by Arindam
Indian Economy Facing Problems Due To Global Instability Said RBI

Reserve Bank of India: The Reserve Bank has warned that the economy is facing problems due to global instability. This volatility is due to geopolitical tensions, rising commodity prices and sluggish foreign demand. The central bank also added that the Indian economy is capable of withstanding this geopolitical instability. However, the Reserve Bank of India (RBI) has not changed its GDP growth forecast for April.

Know why the rates were increased?
Let us tell you that at that time the Reserve Bank had reduced the GDP growth estimate for the financial year 2022-23 from 7.8 per cent to 7.2 per cent. The meeting of the Central Bank’s Monetary Policy Committee (MPC) was held on May 2 and May 4 without a fixed schedule. The central bank on Wednesday increased the policy rate (repo) by 0.40 per cent and the cash reserve ratio (CRR) has also been increased by half a percentage point. This was done in view of rising inflation.

RBI Governor gave information
The decision of the MPC was announced by RBI Governor Shaktikanta Das on Wednesday. He said the policy rate hike is aimed at bolstering and strengthening economic growth prospects in the medium term and we remain conscious of the near-term impacts.

It is important to pay attention to the financial situation
The committee said that the global scenario is very volatile and in such a situation, it is necessary to focus on the domestic macroeconomic situation. The central bank said that the kharif crop is likely to be good with the south-west monsoon being normal. Along with this, investment activities will be supported by strong government capital expenditure, improving capacity utilization, strong corporate ledgers and favorable financial conditions. On the other hand, challenges remain due to deteriorating external environment, rising commodity prices and supply side constraints, the committee said.

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