First Rate Reduction Since 2020 Signals Growth Push
India's Reserve Bank (RBI) has slashed its benchmark lending rate by 25 basis points to 6.25%, marking its first rate cut since May 2020. The surprise move comes as July-September 2024 GDP growth slowed to 5.4% – far below the previous fiscal year's 8.2% expansion.
What’s Driving the Move?
New RBI Governor Sanjay Malhotra cited 'policy space created by current growth-inflation dynamics' as justification, while warning about global financial volatility and trade policy uncertainties. The central bank maintained a neutral monetary stance despite inflationary pressures from extreme weather events.
Young Professionals Take Note
With October-December GDP figures pending, this decision signals increased focus on supporting India's $3.5 trillion economy – a critical market for tech startups and global investors. Analysts suggest the cut could lower business borrowing costs while testing RBI's inflation management amid climate challenges.
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India's RBI announces first rate cut since 2020 amid slowing growth
cgtn.com
