The Repo Rate Hike: Inflation Gave the Cover, the Rupee Gave the Reason

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SumanSpeaks Independent Capital Markets & Geopolitical Intelligence RBI Policy Decoded The Repo Rate Hike: Inflation Gave the Cover, the Rupee Gave the Reason The RBI raised the repo rate by 25 basis points to 5.50 percent on 7 October 2026. With the rupee at ₹96.78 to the dollar, the Fed at 3.75–4.00 percent and bank credit growing near 18 percent, the fuller story is bigger than August CPI of 4.8 percent. The Reserve Bank of India raised the repo rate by 25 basis points to 5.50 percent on 7 October 2026. It is the first hike since February 2023, and the stance has moved from neutral to calibrated tightening. The rate decision was unanimous. The Governor cited inflation. The Monetary Policy Committee said the inflation outlook is no longer as comfortable as it was last year, and near-term rate cuts were taken off the table. That is the official story, and it is not wrong. But it is incomplete. Look at what surrounds the decision: a rupee near its record...
HURRAH!!!!!!!!!!!!!!!!!!!!!!!:
Global Recovery Hopes Gain Momentum as Japan Exits Recession..
TOKYO/NEW DELHI: Spurring further hopes of an easing in global economic situation, the world's second largest economy Japan has exited the recession with GDP growth of 0.9 per cent in the second quarter.
After four straight quarters of contraction, Japan climbed out of the recession to join Germany and France that have already put the worst of the recession behind them.
According to the Japanese Cabinet Office, the country's GDP expanded 0.9 per cent for the three months ended June, while the economy had contracted 3.1 per cent in the first quarter.
Meanwhile, on an annual basis, Japanese economy witnessed a second-quarter growth of 3.7 per cent.
Reflecting the improving economic situation worldwide, European economic majors -- Germany and France -- pulled themselves out of the downward spiral last week, with both economies growing 0.3 per cent in the second quarter, after being mired in recession for about a year.
The world's largest economy too showed signs of perking up with the US Federal Reserve recently saying that the country's economic activity is bottoming out, that financial conditions have started improving.
Further, economies in the Euro zone -- a grouping of 16 nations sharing the common currency euro -- shrank 0.1 per cent in the second quarter, much less than the first-quarter contraction. [From Internet]

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