- The RBI in its monetary policy meeting dated 6 Oct kept the repo rate and stance of the committee unchanged at 6.5% and “withdrawal of accommodation” respectively. RBI Governor Shaktikanta Das also expressed considering open market operation (OMO) sales of bonds, to manage excess liquidity arising out of the rollback of I-CRR funds and an expected increase in currency demand during the ongoing festive season.
- After breaching the RBI’s upper tolerance limit in Jul’23 and Aug’23 by 140 bps and 80 bps respectively, headline CPI inched lower to 5% in Sep’23, on account of a sharp correction in food prices. Core inflation too, eased to a 42-month low at 4.5% in Sep’23.
- Global economic activity is expected to slow down only marginally. The IMF in its latest World Economic Outlook report expects world and advanced economies’ output growth to fall by 0.1% on-year in the next year. Revival in global economic activity bodes well for exports. The World Trade Organization expects global merchandise trade to grow by 3.3% on-year in the next year from 0.8% in 2023.
Overall industrial output growth witnessed a 14-month high of 10.3% in Aug’23 (vs 6% in Jul’23) on account of a favorable base effect. IIP electricity witnessed double-digit growth at 15.3% in Sep’23 vs 8% in Aug’23. This can be partly attributed to higher power demand due to rising temperatures and uneven rains.
TruQuest is knowledge series launched by TruBoard Partners providing succinct updates and views on:
- Liquidity outlook
- India’s macro economic view
- Trends within the infrastructure, Real Estate and Renewable Energy sectors
- Impact analysis of new regulations and policies on lending and capital flow
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