RBI unexpectedly pauses interest rate on inflation concern, cuts GDP growth forecast
Mumbai: The Reserve Bank on Thursday unexpectedly kept benchmark interest rates unchanged on concerns of headline inflation breaching its medium-term target, despite a worrying slowdown in the economy.
After five consecutive cuts in interest rates this year, the six-member monetary policy committee (MPC) headed by RBI Governor Shaktikanta Das unanimously voted to hold the key repo rate at 5.15 per cent and reverse repo rate at 4.90 per cent.
Bankers and economists had widely expected the central bank to cut rates for a sixth time to support a slowing economy, whose growth rate slipped further to a six-year low of 4.5 per cent in the September quarter from 7 per cent a year back.
The RBI reiterated it would maintain an accommodative stance as long as it is necessary to revive economic growth but cut its GDP growth forecast to 5 per cent for the 2019-20 fiscal year (April to March) from 6 per cent earlier estimate.
"The MPC recognises that there is monetary policy space for future action. However, given the evolving growth-inflation dynamics, the MPC felt it appropriate to take a pause at this juncture," the committee said in a statement.
Das said this was a "temporary pause" in the interest rate cutting cycle and the MPC will be better placed to decide on it in February after more data comes in and the government brings out its Budget for 2020-21.
"Let the impact of 135 basis point cut play out more," he said adding timing was important rather than mechanically cutting rates.
In the five reductions this year, the RBI has cut key interest rate by a total of 135 basis points.
"The need at this juncture is to address impediments, which are holding back investments," the RBI said.
Stating that headline inflation at 4.6 per cent in October was "much higher than expected," the central bank raised upwards its inflation forecast for the second half of the fiscal year to 5.1-4.7 per cent from 3.5-3.7 per cent seen previously.
Inflation in October for the first time in more than a year breached the RBI's 4 per cent medium-term target. This primarily was due to uptick in prices of vegetables such as onion and tomatoes, Das said.
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Man dies by suicide after being 'duped of ₹1.5 crore' in stock market scam
Jaipur (PTI): A 42-year-old man allegedly died by suicide after jumping in front of a Sikar-Rewari passenger train in Jhunjhunu district on Saturday morning, officials said.
Police launched a probe into allegations in a three-page suicide note in which the deceased allegedly blamed several individuals for his death, accusing them of cheating his family out of around Rs 1.5 crore through stock market investment.
The deceased cited mounting debts and alleged harassment by creditors as reasons that drove him to take the extreme step.
Kotwali police head constable Mahendra Singh said the deceased, Vimal Kumar Sharma, was identified using a mobile phone recovered from the spot near the New Housing Board police line crossing.
"We contacted numbers stored in the phone, which helped establish his identity. A suicide note was also found in the deceased's pocket," he said, adding that Sharma was engaged in share market trading.
In the suicide note, Sharma alleged that despite lodging a complaint at the Kotwali police station, police conducted no proper investigation and closed the case file without inquiry.
He claimed to possess evidence such as call recordings, a pen drive and bank statements.
Meanwhile, family members reached the hospital and demanded the arrest of the accused persons named in the suicide note, refusing to accept the body until action is taken.
Police said an investigation is underway.
(Assistance for overcoming suicidal thoughts is available on the state’s health helpline 104, Tele-MANAS 14416.)
