The Reserve Bank of India (RBI), led by Governor Shaktikanta Das, has indicated that rate cuts are not currently being considered, prioritizing the control of inflation. As of January 2024, the RBI is focusing on maintaining an inflation rate of 4%, and recent figures show a rise to 5.55% in November. This stance is compounded by the agricultural challenges in North India, where reduced rainfall and snowfall during the winter of 2023-2024 have led to decreased agricultural output and crop quality. These conditions are expected to contribute to higher food prices, further increasing inflationary pressures. The RBI’s monetary policy decisions, including considerations for rate cuts, are being influenced by these economic factors, with a strong emphasis on inflation control amidst these complex agricultural and climatic challenges.
RBI Holds Off on Rate Cuts Amid Rising Inflation and Reduced Agricultural Output Due to Weather Anomalies in North India