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RBI Hikes Repo Rate by 25 Basis Points Amid Concerns Over Stickiness of Core Inflation

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RBI Hikes Repo Rate by 25 Basis Points Amid Concerns Over Stickiness of Core Inflation
RBI Governor Shaktikanta Das (File Photo: indianexpress )

New Delhi: The Reserve Bank of India (RBI) raised its key repo rate by 25 basis points on February 8th, 2023, as expected by the market, but the central bank surprised everyone by leaving the door open for more tightening, stating that core inflation remains high. The central bank’s policy stance remains focused on the withdrawal of accommodation, with four out of six members voting in favor of that position. The monetary policy committee (MPC), made up of three members from the central bank and three external members, raised the repo rate to 6.50% with a split decision. The RBI Governor, Shaktikanta Das, said that the stickiness of core inflation is a concern and the central bank must remain committed to bringing down inflation.

Das stated that the real interest rate, adjusted for inflation, is still below pre-pandemic levels and liquidity remains surplus, albeit lower than during the pandemic. The central bank has reduced the liquidity surplus in the banking system to below 2 trillion rupees ($24.19 billion) from 9-10 trillion rupees post-pandemic support measures.

A significant number of central banks globally have signaled a pause or halt in their tightening as consumer inflation cools down and economic growth shows signs of slowing. India’s annual retail inflation rate eased to 5.72% in December 2022 from 5.88% in November 2022, falling below the RBI’s upper tolerance band for the second straight month. However, core inflation, excluding food and fuel prices, still remained at 6.1%. Consumer inflation is projected to be 6.5% for fiscal year 2023 and 5.3% for fiscal year 2024.

Economists at ING stated that another rate hike of 25 basis points cannot be ruled out until inflation readings fall below 6% and remain there for a couple of months. Capital Economics also stated that there is a clear possibility of another 25 basis point rate hike in April 2023, depending on inflation readings for January and February 2023.

The Indian economy looks resilient, even with uncertainties remaining on global commodity prices. The RBI has projected a growth rate of 6.4% for fiscal year 2024. The global economic outlook has improved, and inflation has started to decline, albeit still above target in major economies. The situation remains uncertain, as stated by Das.

The Indian rupee was little changed against the U.S. dollar at 82.69, and the benchmark bond yield was at 7.3391% against 7.3124% prior to the policy decision. The Nifty 50 index was up 0.78% at 17,860.50 and the S&P BSE Sensex rose 0.69% to 60,701.39 as of 11:39 a.m. IST.

In conclusion, the RBI’s decision to raise its key repo rate by 25 basis points and leave the door open for more tightening surprised the market. The central bank remains focused on the withdrawal of accommodation and remains committed to bringing down inflation. The Indian economy looks resilient, and the global economic outlook has improved. However, the situation remains uncertain, and inflation readings will determine any further rate hikes.

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India

59 Children Saved from Human Traffickers on Bihar-Pune Train in Maharashtra

The Railway Protection Force (RPF) of the Central Railway, in collaboration with the Maharashtra police, successfully rescued 59 children from the clutches of human traffickers during an operation conducted on a Bihar-Pune train.

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59 Children Saved from Human Traffickers on Bihar-Pune Train in Maharashtra
Photo: postsen.com

Mumbai: The Railway Protection Force (RPF) of the Central Railway, in collaboration with the Maharashtra police, successfully rescued 59 children from the clutches of human traffickers during an operation conducted on a Bihar-Pune train. The authorities also apprehended five individuals allegedly involved in the trafficking network, according to officials.

The rescue operation took place at Bhusawal and Manmad stations, situated in Maharashtra’s Jalgaon and Nashik districts, respectively. Acting on reliable information, the RPF, local police, and members of a non-governmental organization (NGO) swiftly responded and conducted a thorough inspection at Bhusawal station. In this first phase, a total of 29 children, aged between eight and 15 years, were safely rescued. Subsequently, during the search at Manmad, another 30 children within the same age group were liberated from the train. The diligent efforts of law enforcement officials resulted in the arrest of five suspects, who now face charges related to human trafficking.

The operation, known as ‘Operation AAHT’, demonstrated an effective collaboration between the RPF, local police, and NGOs. Preliminary investigations suggest that the children were being transported from Bihar to Sangli. The rescued children are now under the care and protection of the authorities, while the accused individuals have been presented before the court to face legal proceedings under anti-human trafficking laws.

Expressing their satisfaction over the successful operation, the RPF took to Twitter, stating, “PRAYAS with state police came together to bust a child trafficking ring, leading to the rescue of 59 children with the arrest of 5 traffickers at Bhusawal and Manmad stations. A powerful collaboration making a tangible difference in the fight against exploitation.”

The joint efforts of the Railway Protection Force, Maharashtra police, and NGOs in rescuing these vulnerable children have once again highlighted the importance of vigilant action against human trafficking. Their unwavering dedication to protecting the lives and well-being of children is a commendable step in the ongoing battle against exploitation.

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Mamata Banerjee’s Street Protest in Kolkata Against Wrestlers’ Manhandling

West Bengal Chief Minister Mamata Banerjee took to the streets on Wednesday to protest against the alleged manhandling of wrestlers at New Delhi’s Jantar Mantar.

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Mamata Banerjee's Street Protest in Kolkata Against Wrestlers' Manhandling
Photo:-Twitter/@ItsYourDev

Kolkata: West Bengal Chief Minister Mamata Banerjee took to the streets on Wednesday to protest against the alleged manhandling of wrestlers at New Delhi’s Jantar Mantar. The wrestlers had attempted to march towards the newly inaugurated Parliament building three days prior.

With a placard reading “We Want Justice,” Banerjee joined a rally that commenced at Hazra Road crossing and concluded at Rabindra Sadan, the cultural hub of Kolkata. The 2.8-kilometer rally saw the participation of former women footballers, ex-soccer players, and various sports personalities, along with common citizens.

The rally was organized by the state’s sports department to express solidarity with the protesting wrestlers, who are demanding the arrest of Brij Bhushan Sharan Singh, the former chief of the Wrestling Federation of India. Singh has been accused of sexually harassing several female grapplers.

The protest came a day after prominent wrestlers such as Sakshi Malik, Vinesh Phogat, and Bajrang Punia, accompanied by hundreds of their supporters, had reached Har ki Pauri to immerse their medals in the river Ganga. However, they were dissuaded from doing so by Khap and farmer leaders.

The wrestlers had been staging their protest at Jantar Mantar since April 23, seeking the arrest of Singh. On May 28, the police removed them from the site when they attempted to march towards the new Parliament building. The wrestlers were initially detained but later released.

Mamata Banerjee’s active involvement in the rally signifies her support for the cause and her dedication to ensuring justice for the wrestlers who have suffered alleged misconduct.

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Sports Minister Appeals to Wrestlers:Don’t take any step to undermine sports, let probe finish

In response to the ongoing protests by wrestlers, India’s Sports Minister, Anurag Thakur, appealed to them not to take any actions that could undermine sports or harm fellow athletes.

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Sports Minister Appeals to Wrestlers:Don't take any step to undermine sports, let probe finish
Photo:newindianexpress

New Delhi: In response to the ongoing protests by wrestlers, India’s Sports Minister, Anurag Thakur, appealed to them not to take any actions that could undermine sports or harm fellow athletes. Thakur assured that appropriate action would be taken once the investigation into the wrestlers’ allegations is completed. His comments came a day after the wrestlers threatened to immerse their medals in the sacred river Ganga.

Thakur also announced that the Wrestling Federation of India (WFI) would soon hold elections to form a new governing body. Currently, the WFI president has stepped aside, and the Indian Olympic Association-appointed committee of administrators is making day-to-day decisions.

The minister urged the wrestlers to maintain patience and have faith in the ongoing investigation conducted by the Delhi police, which is looking into the allegations against the former WFI chief, Brij Bhushan Sharan Singh. Thakur emphasized that his ministry promptly responded to the wrestlers’ complaints and would take appropriate action based on the investigation’s findings.

Thakur also highlighted the government’s efforts to support athletes and enhance sports in the country. He listed various steps taken to fulfill the players’ aspirations and strengthen sports, including increased funding for sports from Rs 874 crore to over Rs 2782 crore. Additionally, he mentioned initiatives like Khelo India and TOPS, which have helped Indian athletes achieve success at international events.

The wrestlers, including prominent names such as Sakshi Malik, Vinesh Phogat, and Bajrang Punia, along with their supporters, had planned to immerse their medals in the river Ganga to protest against the alleged sexual harassment by Brij Bhushan Sharan Singh. However, they were convinced by Khap and farmer leaders to refrain from doing so.

Thakur acknowledged that a committee was promptly formed after the wrestlers’ complaints and that additional members were included at their request to ensure an impartial probe. He stated that an FIR was registered following the committee’s report and subsequent directions from the Supreme Court.

The minister emphasized the importance of completing the investigation and not taking any steps that could undermine sports or hurt athletes. He reassured the wrestlers that an impartial investigation was being conducted and appropriate action would be taken based on its outcome.

Thakur also addressed the issue of the protests being politicized, stating that the wrestlers had initially made it clear that their platform was not for political purposes. However, he noted that various political parties and trade unions had become involved in their cause.

In conclusion, Thakur expressed the government’s commitment to promoting sports and supporting athletes. He highlighted the significant budget increase for sports and the development of new sports infrastructure facilities to fulfill the aspirations of Indian sportspersons. The minister urged the wrestlers to maintain their confidence in the ongoing police investigation and refrain from actions that may harm fellow athletes or the sports community.

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