A tough call: on the RBI mpc's first policy review of 2025 -

The reserve bank of India’s Monetary Policy Committee (MPC) will conclude its first policy review of 2025 on Friday (February 7, 2025) Et. For one, the key personnel has changed. The rbi has a new governor, with former review secretary sanjay malhotra replacing shaktikanta das soon after the last review. Deputy Governor Michael Patra, an mpc member who was in charge of monetary policy, also retired last month. With the center it to name his success, Navigating this review is going to be a tad tad tad tad tad tad for the new central bank boss, with another deputy holding additional charge of monetary policy. Second, The Rupee is in a free fall of sorts. After Hitting 85 to the Us Dollar on December 19, 2024, It Slipped to 86 on January 13, 2025 and Crossed 87 on February 3, Partly Due to the Third Factor at Work. The Strengthening Dollar is Driven by Us President Donald Trump’s overdrive to ‘Make America Great Again’ With Higher Tarifs on Major Trade Partners, And OThener Disruptive Plans Such X accords, shutting aid flows, et al.

One thing has not changed – the clamor for an interest rate from Industry and Government Honchos. In December, this noise was heightened after a sharp growth blip in the july-partem Quarter when GDP Grew Just 5.4%. Now, with 2024-25 GDP growth downgraded to just 6.4%, and the no marked uptick in Economic Metrics in the December-Ending Quarter, Growth Worries Remain Entrenched. In the interim, there has been some back and forth between north block and mint street on the factors Responsible for Stumbling Economic Activity. The finance ministry sought to lay some of the blame for an urban demand slump on tight monetary policy. RBI Officials, In the Tentral Bank’s January Bulletin, said “one way” to spark a growth rebound and a virtuous cycle of fresh private investments, is to boost Consumptation Through ly for the urban middle class that has been pining for Relief from Food Inflation. With the budget delivery on this front with income tax cuts, the ball is back in the RBI’s court. Inflation has been over 5% in the last five months, but may have eased closer to the RBI’s 4% target in January. But a rate cutwal also hurt the rupee further, and spur higher important inflation. It is an unnenviable situation for the new rbi chief to be in; He might be tempted to take a cue from Mr. Das who had surprised markets with a rate cut in the first review under his watch in 2019, Reversing His Predcessor’s Stance.