Even if the Reserve Bank of India's Monetary Policy Committee decided to hold interest rates in the October meeting, it acknowledged the scope for further rate cuts while waiting for the impact of the past steps to play out.
The cumulative rate hikes of 2.5 percentage points by the central bank since May 2022 negatively impacted headline inflation by 1.60 per cent, a paper by senior RBI staffers said on Monday. "Policy rate increases have anchored inflation expectations and modulated aggregate demand, generating disinflationary responses," the paper by Deputy Governor Michael Patra, Indranil Bhattacharyya, Joice John and Avnish Kumar, said.
For the first time, the value of card and mobile payments of Rs 10.57 trillion was more than ATM withdrawals of Rs 9.12 trillion in Q4 of fiscal 2019-20. In the months of lockdown, the gap may have widened further, but cash could be back in vogue when the situation normalises.
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