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RBI Holds Rates Amid Growth And Inflation Risks Why in the News ? The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.25% while lowering India’s GDP growth forecast for FY 2026-27 and raising inflation projections due to global uncertainties, supply disruptions affecting agri-food exports, …
Read MoreIndia Shifts Towards Producer Price Index Framework Why in the News ? The Government of India has decided to gradually replace the Wholesale Price Index (WPI) with a Producer Price Index (PPI) system. The move aims to modernize India’s inflation measurement framework, improve price tracking, and align with international statistical standards, similar to how environmental …
Read MoreRupee Depreciation Sparks Debate Over RBI’s Intervention Strategy Why in the News ? The continuous fall in the Indian rupee against the US dollar has triggered debate on whether the Reserve Bank of India (RBI) should actively defend the currency using forex reserves or allow market forces to determine its real exchange value. Reasons Behind …
Read MoreSHOULD RBI DEFEND RUPEE, OR LET IT FIND ITS OWN LEVEL Why in the News? The Indian rupee has witnessed a sharp depreciation against the US dollar, triggering concerns about the stability of the Indian economy. Policymakers are debating whether the Reserve Bank of India should actively defend the rupee or allow market forces to …
Read MoreA REVISION OF GDP AND ITS IMPLICATIONS Why in the News? India has released a revised GDP series with 2022–23 as the new base year, replacing the earlier 2011–12 base year series. The revision reduces the estimated absolute size of GDP and alters the sectoral composition of production in the economy. While the correction in …
Read MoreNew CPI Series Sets Inflation at 2.75% Why in the News? The Ministry of Statistics and Programme Implementation (MoSPI) released the revised Consumer Price Index (CPI) with 2024 as the new base year, placing retail inflation at 2.75% for January 2026, reflecting updated consumption trends from HCES 2023–24. This revision has implications for the foreign …
Read MoreRESERVE BANK OF INDIA’S MONETARY POLICY COMMITTEE DECISION Why in the News? Policy Status: Repo rate unchanged at 25%, reflecting RBI’s decision to pause after cumulative rate cuts in 2025. Growth Upgrade: FY26 GDP forecast raised to 4%, indicating sustained economic momentum despite global uncertainties. Inflation Revision: FY26 CPI projection increased to 1%, while remaining …
Read MoreCentral Banks, Fiscal Deficits, and Emerging Debt Risks Syllabus: GS-2: Planning , Mobilization of Resources , Fiscal Policy, Direct & Indirect Farm Subsidies Why in the News ? Rising sovereign debt levels, especially in the United States, and the growing role of central banks in indirectly financing government deficits through quantitative easing (QE) and liquidity …
Read MoreRBI’s Liquidity Push Masks Deeper Banking Stress Syllabus: GS Paper – 3 Banking Sector & NBFCs, Statutory Bodies, Monetary Policy, Growth & Development Why in the News? The Reserve Bank of India (RBI) has announced large-scale liquidity infusion measures, including Open Market Operations (OMOs) and dollar-rupee swap auctions, despite system liquidity being in surplus. This …
Read MoreRBI Boosts Liquidity Through OMOs and Swap: An Environmental Clearance Perspective Why in the News? The Reserve Bank of India (RBI) announced a major environmental clearance-like liquidity infusion through ₹2 trillion Open Market Operations (OMOs) and a $10 billion dollar-rupee swap, amid persistent liquidity deficit, rupee pressure, and elevated government bond yields. This move can …
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