Minutes of the Monetary Policy Committee Meeting: February 6-8, 2024

Explore the detailed insights from the Minutes of the Monetary Policy Committee meeting held on February 6-8, 2024, with comprehensive coverage of key discussions on the economic outlook, policy decisions, and individual perspectives.

Meeting Attendees:

The forty-seventh meeting of the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) convened from February 6 to 8, 2024. All members were present, including Dr. Shashanka Bhide, Dr. Ashima Goyal, Prof. Jayanth R. Varma, Dr. Rajiv Ranjan, and Dr. Michael Debabrata Patra, with Shri Shaktikanta Das chairing the proceedings.

Discussion Highlights: Minutes of the Monetary Policy

As per the RBI Act, the committee extensively deliberated on various economic indicators, surveys, and staff projections. Key areas of focus included consumer confidence, inflation expectations, corporate performance, credit conditions, and the outlook for different economic sectors.

Policy Decision:

After thorough discussions, the MPC resolved to maintain the policy repo rate under the liquidity adjustment facility (LAF) at 6.50%. Concurrently, other rates such as the standing deposit facility (SDF), marginal standing facility (MSF), and Bank Rate remained unchanged. The committee emphasized the importance of aligning inflation with the target while ensuring support for economic growth objectives.

Minutes of the Monetary Policy: February 6-8, 2024

Economic Outlook:

The global economic outlook for 2024 was deemed stable, with inflation gradually receding from recent peaks. Domestically, economic activity exhibited strength, with GDP growth projected at 7.3% for 2023-24, primarily driven by investment. Looking forward, factors such as improved consumer consumption, private investment, and global trade integration were expected to sustain GDP growth at 7.0% for 2024-25.

Inflation Assessment:

CPI inflation rose to 5.7% by December 2023, primarily due to food inflation, while core inflation remained subdued. The trajectory of inflation would depend on variables such as food prices, the impact of monetary policy, and global crude oil trends. CPI inflation projections stood at 5.4% for 2023-24 and 4.5% for 2024-25, assuming normal monsoon conditions.

Individual Perspectives and Votes:

During the meeting, members expressed diverse viewpoints on economic conditions and policy actions. Dr. Shashanka Bhide emphasized sustaining growth momentum, while Dr. Ashima Goyal stressed the importance of maintaining the policy status quo. Prof. Jayanth R. Varma advocated for a reduction in the repo rate, while Dr. Rajiv Ranjan and Dr. Michael Debabrata Patra supported maintaining the existing policy stance.

Dr. Shashanka Bhide’s Perspective:

Dr. Shashanka Bhide provided a comprehensive analysis during the meeting, highlighting the robustness of domestic economic activity despite challenges such as adverse monsoon conditions, weak external demand, and geopolitical conflicts. He noted that real GDP growth for FY 2023-24 is estimated at 7.3%, exceeding the previous year’s 7.2%, with strong momentum continuing into the second half of the fiscal year. Various indicators like non-food credit, PMIs, and GST collections indicate strong demand conditions.

Dr. Bhide emphasized the importance of sustaining growth momentum, particularly in consumption demand, which relies on improved employment and household income conditions. He mentioned the recent improvement in consumer confidence and business optimism but cautioned about the need for cautious spending behavior.

Regarding inflation, Dr. Bhide discussed the factors contributing to headline CPI inflation, including food price inflation and the moderation of core inflation. He emphasized the significance of decelerating food inflation to achieve sustained inflation moderation. He also mentioned surveys indicating a decline in current and future inflation expectations among urban households.

Additionally, Dr. Bhide provided insights from enterprise surveys, reporting mixed price conditions across sectors. He highlighted an increase in inflation expectations reported by the Business Inflation Expectations Survey (BIES) and the RBI Survey of Professional Forecasters. Despite these factors, Dr. Bhide expressed confidence in achieving the inflation target while sustaining growth momentum.

In conclusion, Dr. Bhide voted to keep the policy repo rate unchanged at 6.50% and emphasized the need to withdraw accommodation gradually to align inflation with the target while supporting growth.

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Dr. Ashima Goyal’s Perspective:

Dr. Ashima Goyal provided insights on the global and domestic economic scenario during the meeting. She noted that geopolitical risks persist, but oil prices haven’t surged as expected, and global growth hasn’t slowed significantly. Advanced economy central banks are cutting rates as inflation approaches targets, indicating nuanced actions for a soft landing. Indian growth has surpassed expectations, showing resilience to global shocks, although some high-frequency indicators softened recently.

Inflation in India has been below predictions, and core inflation is softening, suggesting output remains below capacity. Reforms and structural changes are reducing costs, and corporates are focusing on volume over price growth. Dr. Goyal emphasized that inflation is moving towards the target, which should anchor core inflation around 4%. Fiscal consolidation and better government expenditure composition will further ease inflationary pressures.

Dr. Goyal suggested maintaining the status quo on rates as growth remains robust and recent headline inflation nears the upper tolerance band. She advocated waiting to see if commodity price shocks persist before considering rate hikes. Supply-side improvements are necessary to reduce shocks, and measures to ensure the weighted average call rate (WACR) aligns with the repo rate are needed.

Additionally, Dr. Goyal highlighted the need for expanded measures to counter liquidity shocks and improve liquidity flow in the financial system. Banks tend to hoard liquidity when tight, impacting non-bank financial intermediaries’ ability to access credit. She emphasized the importance of macroprudential tightening to reduce balance sheet stress and the role of adequate liquidity in preventing insolvency risks.

Dr. Goyal concluded by citing examples of resilience measures, such as the decline in rupee volatility and FX forward premiums in the Indian foreign exchange market, indicating policy rate independence from US rates and attracting debt inflows.

Prof. Jayanth R. Varma’s Perspective:

Prof. Jayanth R. Varma expressed his views on the current economic situation during the meeting. He highlighted that while inflation is projected to average 4.5% in 2024-25, the current policy rate of 6.5% results in a real interest rate of 2%, which he believes is unnecessarily high to achieve the inflation target of 4%. He argued that despite robust economic growth, there is no evidence of overheating.

Prof. Varma disagreed with the notion that the output gap has closed and that the projected growth rate of 7% for 2024-25 exceeds India’s growth potential. He cited various policy measures and infrastructure investments that should enhance the economy’s growth potential. He also noted that the compound average growth rate of real GDP from the pre-pandemic level is relatively low, indicating resilience rather than significant permanent damage.

In his view, if the potential growth rate of the economy is around 8%, then a real interest rate of 1-1.5% would suffice to steer inflation towards the target. A real interest rate of 2% poses a risk of exacerbating growth pessimism. Prof. Varma emphasized that continued fiscal consolidation in 2024-25 creates room for monetary easing without triggering inflation.

He advocated for the MPC to take its dual mandate of inflation and growth seriously and to signal a commitment to maintaining an appropriate real interest rate. Therefore, he voted to reduce the repo rate by 25 basis points and to change the stance to neutral.

Dr. Rajiv Ranjan’s Perspective:

Dr. Rajiv Ranjan outlined his perspective on the economic situation since the last policy meeting. He noted that while growth is holding up better than expected, inflation has surpassed 5% in November and December, with notable signs of disinflation in core inflation. He found comfort in global economic improvements, including declining inflation in advanced economies and benign commodity prices, along with the government’s commitment to fiscal consolidation in the interim budget.

Dr. Ranjan voted to maintain the status quo on rates and stance for several reasons. First, he highlighted the substantial cumulative rate hikes undertaken by the MPC previously, contrasting with the less aggressive approach of central banks in advanced economies. Second, given the uncertainty surrounding the inflation trajectory and the need for clarity on crop conditions, maintaining the current stance seemed prudent.

He cautioned against market exuberance and emphasized the importance of consistency and credibility in monetary policy to anchor inflation expectations. Dr. Ranjan stressed the delicate transition period, where premature policy changes could disrupt market expectations. He advocated for caution and conservatism in managing the present economic scenario, relying on India’s strong fundamentals to navigate the challenges effectively.

Dr. Michael Debabrata Patra’s Perspective:

Dr. Michael Debabrata Patra highlighted the sustained momentum in domestic economic activity, supported by a shift towards investment. While private capital expenditure is yet to gain full momentum, factors such as high corporate profitability and a strong commitment to fiscal consolidation are expected to bolster its onset. Despite global uncertainty, the productive capacity of the economy is expanding, largely funded domestically, reducing vulnerability to external financial flows.

However, private consumption, especially in rural areas, is constrained by elevated food inflation. Dr. Patra emphasized the importance of restraining inflation to ensure inclusive and sustained growth. He noted that food supply pressures continue to impede disinflation, despite steady easing in core inflation. While consumer and business sentiment indicators are positive, aligning inflation with the target is crucial for sustaining optimism.

Dr. Patra underscored that high inflation erodes purchasing power, particularly affecting vulnerable groups. He advocated for maintaining restrictive monetary policy to exert downward pressure on inflation while minimizing output costs. He voted to keep the policy rate unchanged and continue with the stance of withdrawing accommodation until inflation subsides and remains close to the target consistently.

Shri Shaktikanta Das’s Perspective:

Shri Shaktikanta Das commended India’s strength and resilience amidst global challenges, attributing it to proactive and calibrated policies. He emphasized the importance of maintaining macroeconomic and financial stability as foundations for sustainable and inclusive growth. Real GDP growth for 2023-24 is projected at 7.3%, with inflation expected to soften to 5.4%. Despite intermittent food price shocks, core inflation has steadily decreased, reaching a four-year low of 3.8%.

Looking ahead, GDP growth is expected to remain resilient in 2024-25, supported by robust economic activity, improved rural consumption due to better rabi sowing, and strong urban demand. Private capital expenditure has increased, bolstered by government infrastructure initiatives and favorable corporate and banking conditions. Manufacturing and services sectors are upbeat, contributing to a projected 7.0% GDP growth in 2024-25.

Das stressed the importance of maintaining vigilance in monetary policy to navigate the “last mile” of disinflation successfully. Premature policy moves may undermine progress achieved so far. Therefore, he advocated for keeping the policy repo rate unchanged and continuing the focus on withdrawing accommodation to achieve the 4% inflation target while supporting growth objectives.

Conclusion and Next Steps:

The MPC’s decision reflected a balance between managing inflation and supporting economic growth amid domestic and global uncertainties. Minutes of the meeting will be published on February 22, 2024. The next MPC meeting is scheduled for April 3 to 5, 2024, providing an opportunity to reassess economic conditions and policy strategies.


With the discussion concluded, the meeting adjourned on February 8, 2024, with a commitment to continued vigilance in addressing economic challenges and achieving policy objectives.

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Unlocking Insights: RBI’s Monthly Bulletin February 2024

Unlock valuable insights into the economic landscape with RBI’s Monthly Bulletin February 2024. Explore key articles, analyses, and trends for informed decision-making.

The Reserve Bank of India (RBI) has unveiled the highly anticipated February 2024 issue of its Monthly Bulletin, offering a wealth of insights into the economic landscape. This edition comprises a monetary policy statement, five impactful speeches, and four thought-provoking articles, complemented by current statistics, providing a comprehensive overview of recent trends and developments.

RBI’s Monthly Bulletin February 2024: Key Articles:

I. State of the Economy:

Within RBI’s Monthly Bulletin February 2024, the global economic outlook shines bright, with optimism for stronger-than-expected growth in 2024. India’s economic momentum remains robust, supported by encouraging high-frequency indicators. The Bulletin notes expectations of increased corporate sector capital expenditure, fueling optimism for future growth. Notably, consumer price inflation has moderated, while core inflation stands at its lowest since October 2019.

RBIs Monthly Bulletin February 2024

II. The Shape of Growth Compatible Fiscal Consolidation:

In the RBI’s Monthly Bulletin February 2024, authored by Michael Debabrata Patra, Samir Ranjan Behera, Harendra Kumar Behera, Shesadri Banerjee, Ipsita Padhi, and Saksham Sood, this article emphasizes the importance of prioritizing developmental expenditure in India to foster medium-term complementarities between fiscal consolidation and growth. Utilizing a dynamic stochastic general equilibrium (DSGE) model, the article outlines a fiscal consolidation trajectory by directing government expenditure towards employment-generating sectors, climate risk mitigation, and digitalization.


  • The Interim Budget for 2024-25 targets a gross fiscal deficit of 5.1 percent of GDP in 2024-25, aligning with the goal of 4.5 percent of GDP by 2025-26. Capital expenditure has been bolstered post-pandemic, with its share increased to 3.4 percent of GDP.
  • Empirical findings underscore the medium-term benefits of judicious fiscal consolidation, outweighing short-run costs. Investments in social and physical infrastructure, climate mitigation, digitalization, and skill development can yield sustainable growth dividends.
  • Utilizing a dynamic stochastic general equilibrium model, the analysis predicts a substantial decline in the general government debt-GDP ratio to 73.4 percent by 2030-31 if government expenditure is directed towards the aforementioned sectors.

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III. Headline and Core Inflation Dynamics:

In the RBI’s Monthly Bulletin February 2024, written by Asish Thomas George, Shelja Bhatia, Joice John, and Praggya Das, this article delves into the impact of significant supply-side shocks on the inflation process since 2020, including those triggered by COVID-19, the war in Ukraine, and adverse climatic events. It compares the desirable properties of various Consumer Price Index (CPI) core inflation measures, such as ease of communication, equality of means, lower variance, predictability, co-integration, unbiasedness, and attractor condition, during the full sample period from January 2012 to December 2023, against the pre-COVID period, to assess their effectiveness in capturing underlying inflation movements.


  • Various core inflation measures, including exclusion-based, trimmed means, reweighted CPI, and trend CPI, maintained their desirable properties compared to the pre-COVID period.
  • Since early 2020, multiple supply-side shocks, particularly in the food and energy sectors, have resulted in some degree of persistence in headline inflation. This has led to spillovers from non-core to core inflation, thereby weakening certain properties of core inflation. However, in the long run, non-core inflation still tends to converge to core inflation.

IV. Evolving Business Sentiments:

In the RBI’s Monthly Bulletin February 2024, authored by Abhilash Arun Satape, Nivedita Banerjee, and Supriya Majumdar, this article explores the significance of business tendency surveys, such as the Services and Infrastructure Outlook Survey (SIOS) conducted by the Reserve Bank of India, in extracting forward-looking signals about potential movements in related macro variables. It provides insights into the behavioral changes observed in various qualitative parameters captured in the SIOS from Q1:2014-15 to Q2:2023-24.


  • Results demonstrate the efficacy of the SIOS as a forward-looking assessment tool, establishing a robust connection between survey parameters and macroeconomic variables. Survey responses offer valuable lead information for understanding the evolution of output and prices in the services and infrastructure sectors.
  • Assessments by respondents on the overall business situation play a crucial role in nowcasting sector-specific growth trajectories, while expectations regarding selling prices provide valuable inputs for inflation forecasting.
  • Despite challenges stemming from the pandemic and subsequent external shocks, both the services and infrastructure sectors exhibited a gradual rebound as businesses reopened and restrictions eased. The survey’s captured perception of business entities indicates a recovery of confidence in the economy post-COVID, despite differences in the nature of business between sectors covered in the SIOS.

The February 2024 RBI Bulletin provides a wealth of insights, offering policymakers, investors, and stakeholders a nuanced understanding of recent economic trends. Stay informed with the latest analyses and forecasts shaping India’s economic landscape.

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Navigating the Dual Forces: US Inflation and China’s Deflation Impact on Emerging Markets Like India

Explore the repercussions of high US Inflation and China’s deflationary influence on Emerging Markets, with a focus on India’s economic landscape. Gain insights into market trends, potential trade disruptions, and strategies for navigating these complex dynamics.

Understanding US Inflation Trends

The recent data on Consumer Price Index (CPI) and Producer Price Index (PPI) in the United States has stirred financial markets, with CPI coming in higher than expected at 3.1% year-on-year and PPI experiencing a significant rise of 0.3% month-on-month. These numbers have led to speculation about the Federal Reserve’s stance on interest rates.

Implications for Emerging Markets

The inflationary pressures in the U.S., coupled with China’s deflationary stance due to aggressive price cuts and increased global market share, raise concerns about their impact on Emerging Markets (EMs) like India. This dual force of inflation and deflation creates a complex scenario for EMs to navigate.

Insights from Morgan Stanley’s Analysis

Morgan Stanley’s Chief Asia Economist, Chetan Ahya, provides insights into the implications of these trends. Despite the surprising inflation figures, Morgan Stanley maintains its forecast of a rate cut by the Federal Reserve in June. The expectation is based on projections of sequential inflation narrowing in the second quarter, along with a slowdown in job growth.

US Inflation and China's Deflation Impact on EM's

Assessing U.S. Fiscal Policy

The discussion extends to U.S. fiscal policy, with indications of a potentially high fiscal deficit for the year. This raises questions about the impact on long-term bond yields, especially considering ongoing Treasury issuances.

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China’s Deflationary Influence

China’s role as a deflationary force is examined, with export prices experiencing deflationary trends, particularly in sectors like durable goods and new energy transition-related goods. The analysis underscores the wide-ranging impact of China’s deflationary pressures on global markets.

Potential Trade Disruptions

Concerns are raised about potential trade disruptions, especially if the Republicans come to power in the U.S. The threat of increased tariffs on Chinese imports could significantly impact regional economies, necessitating strategic responses.

RBI’s Response and India’s Position

For India, the Reserve Bank faces the challenge of balancing domestic inflationary pressures, particularly in food prices, with external deflationary forces. While certain sectors may face challenges, India’s diversified growth drivers mitigate some macroeconomic concerns.

Impact on Indian Industries

The conversation delves into the potential impact on Indian industries, such as steel, amidst cheaper imports from China. While some sectors may face margin pressures, the overall macroeconomic outlook remains cautiously optimistic.

Broadening Growth Trends in India

Discussions on India’s growth trajectory highlight signs of broadening consumption and investment trends, particularly in rural areas. Despite challenges, there are indications of growth spreading across different segments of the economy.

Looking Ahead

The conversation concludes with optimism about India’s growth prospects, anticipating a broadening of consumption patterns and continued economic resilience amidst global uncertainties.

In summary, the interplay between U.S. inflation dynamics, China’s deflationary pressures, and India’s economic resilience underscores the intricate dynamics shaping Emerging Markets in the current global landscape.

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RBI Issues Modified Directions for Paytm Payments Bank, Prioritizing Customer Interests

With a focus on the welfare of customers, including merchants, of Paytm Payments Bank Ltd (PPBL) who may need additional time to make alternative arrangements, as well as considering the broader public interest, the Reserve Bank of India (RBI) has issued modified directions under Section 35A of the Banking Regulation Act, 1949. These Directions, which partially modify earlier directives dated January 31, 2024, signify a balanced approach aimed at safeguarding stakeholders while ensuring regulatory compliance and stability in the banking sector.

Revised Directions Issued by RBI

In partial modification of earlier Directions dated January 31, 2024, the RBI has issued revised Directions for PPBL. Effective from March 15, 2024 (extended from the earlier deadline of February 29, 2024), the following measures are to be implemented:

  • Deposits and Credit Transactions: No further deposits, credit transactions, or top-ups shall be allowed in any customer accounts, prepaid instruments, wallets, FASTags, National Common Mobility Cards, etc., except for interest, cashbacks, sweep-ins from partner banks, or refunds.
  • Withdrawals: Customers are permitted to withdraw or utilize balances from their accounts, including savings bank accounts, current accounts, prepaid instruments, FASTags, National Common Mobility Cards, etc., without any restrictions, up to their available balance.
  • Banking Services: Except for withdrawals or utilization of available balances, no other banking services, including fund transfers (such as AEPS, IMPS, etc.), BBPOU, and UPI facility, shall be provided by the bank after March 15, 2024. However, fund transfers for withdrawal purposes may be allowed at any time.
  • Closure of Nodal Accounts: The Nodal Accounts of One97 Communications Ltd and Paytm Payments Services Ltd maintained by PPBL are to be terminated at the earliest, no later than February 29, 2024.
  • Pipeline Transactions: Settlement of all pipeline transactions in nodal accounts initiated on or before February 29, 2024, shall be completed by March 15, 2024, with no further transactions permitted thereafter.
RBI Issues Modified Directions for Paytm

Facilitation of Withdrawals and Seamless Deposit Withdrawal

PPBL is directed to facilitate withdrawals up to the available balance from all accounts and wallets, excluding those frozen or lien-marked by Law Enforcement or judicial authorities. Additionally, the bank must ensure seamless withdrawal of customer deposits parked with partner banks under the automatic ‘sweep-in sweep-out’ facility, without causing inconvenience to customers.

Also Read: RBI Takes Stern Action Against Paytm Payments Bank

Issuance of FAQs on Paytm

To provide clarity and assistance to customers of PPBL and the general public, a list of Frequently Asked Questions (FAQs) has been issued by the RBI. These FAQs aim to address common queries and concerns regarding the business restrictions imposed on PPBL.

In conclusion, the RBI’s imposition of business restrictions on PPBL underscores the regulator’s commitment to ensuring the stability and integrity of the banking system. By issuing revised Directions and facilitating seamless transactions, the RBI aims to mitigate any potential disruptions while safeguarding the interests of customers and the broader public.

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Japan Slips Into Recession: Causes and Implications

Japan’s economy, once a powerhouse, is now facing the harsh reality of a recession. Despite global attention being on China’s economic slowdown, Japan’s unexpected slip into recession has major implications. The country’s economy, now the world’s fourth-largest, contracted by 0.1% in the December quarter, with significant factors contributing to this downturn.

Japan Recession: Currency Woes and Domestic Consumption Decline

A primary driver behind Nippon’s recession is the sharp fall in the value of the Yen against the US dollar. Over the past two years, the Japanese currency has depreciated significantly, making imports more expensive and impacting the overall economy. Additionally, domestic consumption has seen a decline, with private consumption, a significant contributor to the economy, contracting by 0.2%. High inflation has further dampened consumer spending, exacerbating the economic downturn.

Japan Slips Into Recession

Challenges Ahead: Labor Shortage and Aging Population

Japan faces a dual challenge of a labor shortage and an aging population. Despite efforts to boost birth rates, the country continues to grapple with a shrinking workforce. This demographic issue, coupled with a labor crunch, poses significant hurdles for economic revitalization. While the government aims to address these challenges through policy measures, the long-term sustainability of Japan’s economy remains uncertain.

Monetary Policy Dilemma and Export Benefits

The Bank of Japan has maintained a negative interest rate regime to stimulate economic activity. However, with weaker-than-expected growth and looming uncertainties, the central bank faces a dilemma regarding interest rate normalization. On the flip side, a weakened Yen benefits Japanese exporters, making their goods more competitive in international markets. This export advantage offers some relief amidst economic challenges.

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Germany’s Economic Woes and UK’s Recession

Germany, now the third-largest economy, faces its own set of challenges, including an aging population, resource scarcity, and inflationary pressures. Similarly, the UK has suffered a recession, experiencing negative growth for two consecutive quarters. These developments further underscore the global economic landscape’s fragility and interdependence.

Implications for India: A Silver Lining?

Amidst the economic woes of Japan, Germany, and the UK, India emerges as a potential beneficiary. With ambitious growth projections and a young demographic dividend, India is poised to become a significant player in the global economy. Estimates suggest India will surpass Japan and Germany in economic size by 2026 and 2027, respectively. This presents an opportunity for India to strengthen its position on the world stage and drive economic growth through strategic reforms and investments.


The recessionary trends in Japan, coupled with economic challenges in Germany and the UK, highlight the complexities of the global economic landscape. While these developments pose short-term challenges, they also present opportunities for countries like India to capitalize on their demographic advantages and drive sustainable growth. As the world navigates through uncertain times, strategic policymaking and international cooperation will be crucial in shaping a resilient and inclusive global economy.

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Lord Mayor of London’s Visit to India: Exploring Trade Opportunities and Strengthening Bilateral Relations

Lord Mayor of London’s Visit to India: A Diplomatic Endeavor

The recent visit of the Lord Mayor of London, Michael Mainelli, to India marks a significant milestone in the ongoing efforts to bolster trade relations between the United Kingdom and India. With a focus on Free Trade Agreement (FTA) talks and exploring investment opportunities, the visit underscores the commitment of both nations to fostering economic cooperation and partnership.

Negotiations and Challenges in FTA Talks

Despite progress in negotiating 26 chapters of the India-UK FTA, challenges persist, particularly regarding issues such as business visas and intellectual property rights (IPR). The visit of Lord Mayor Michael Mainelli aims to address these challenges by engaging in discussions with government officials and business leaders across New Delhi, Pune, and Mumbai. Such efforts highlight the determination to overcome obstacles and forge stronger ties between the two nations.

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The UK-India Infrastructure Bridge: A Catalyst for Investment

An essential aspect of the visit is the UK-India Infrastructure Bridge, initiated by Lord Mayor Mainelli’s predecessor, Nick Lyons. This ambitious project aims to attract global investments into India by enhancing the attractiveness of infrastructure projects to international investors. With expertise in areas ranging from energy to transportation, the infrastructure bridge seeks to streamline due diligence processes and structure deals to make them more appealing to investors.

Lord Mayor of London's Visit to India

Collaboration in Research and Development

In addition to trade and investment, collaboration in research and development (R&D) emerges as a key priority during the visit. Lord Mayor Mainelli emphasizes areas such as mental health, life sciences, quantum computing, and artificial intelligence (AI) as potential areas for collaboration between UK universities and institutions in India. Initiatives like ethical AI courses and certifications demonstrate a shared commitment to responsible innovation and regulatory frameworks in emerging technologies.

Addressing Global Challenges: Space Debris and AI Regulation

Beyond economic cooperation, the visit also focuses on addressing pressing global challenges. One such issue is space debris, where proposals for space debris retrieval insurance bonds are being explored to mitigate the risks posed by orbital clutter. Additionally, discussions on AI regulation underscore the importance of self-regulation to ensure innovation while safeguarding ethical standards. Collaboration between India and the UK in these areas reflects a shared commitment to global sustainability and responsible technological advancement.

Conclusion: A Path Towards Mutual Prosperity

Lord Mayor Michael Mainelli’s visit to India signifies a significant step forward in strengthening bilateral relations and exploring new avenues for collaboration. By addressing challenges in FTA negotiations, promoting infrastructure investments, and fostering innovation in research and development, both nations pave the way for mutual prosperity and sustainable growth. As the world continues to navigate economic uncertainties and global challenges, the partnership between the UK and India stands as a beacon of cooperation and resilience in an ever-changing landscape.

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Microsoft CEO Satya Nadella’s Insights on AI’s Role in Driving Economic Growth

Introducing Satya Nadella’s Vision for AI-Led Economic Growth

Microsoft CEO Satya Nadella reflects on his 10-year tenure and discusses the transformative potential of artificial intelligence (AI) in driving economic growth.

The Impact of AI on Economic Productivity

Nadella in an interview with Moneycontrol, highlights AI’s role in enhancing productivity across various sectors, from software development to frontline work in retail and healthcare.

Rapid Adoption of AI and Its Pervasive Impact

Satya Nadella discusses the rapid diffusion of AI technology and its broad impact on commercial and nonprofit sectors, enabling seamless access to services for citizens.

Satya Nadella's Insights on AI's Role

Addressing Workforce Displacement Concerns

Nadella acknowledges concerns about workforce displacement but emphasizes the adaptability of labor markets and the potential for AI to accelerate skill acquisition.

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Augmenting Expertise and Creating New Job Opportunities

Satya Nadella explores how AI can augment expertise among frontline workers, potentially leading to improved wages and the creation of new job opportunities, citing initiatives like Kora in rural India.

Managing Job Losses and Transitioning Effectively

Nadella views job losses as part of the natural evolution accompanying technological advancements and emphasizes the importance of policy interventions and reskilling programs in managing this transition effectively.

Microsoft’s Commitment to AI Investment in India

Nadella underscores Microsoft’s commitment to investing in AI infrastructure and talent development in India, aiming to harness AI’s potential across various sectors.

Collaboration and Innovation in AI Development

Nadella discusses Microsoft’s partnership with OpenAI, emphasizing the importance of collaboration in fostering technological innovation and benefiting customers worldwide.

Embracing Innovation for Long-Term Growth

Reflecting on his tenure at Microsoft, Satya Nadella emphasizes the significance of embracing innovation and fostering a culture of democratized AI accessibility to drive sustainable long-term growth.

Conclusion: AI’s Role in Shaping Future Economies

In conclusion, Nadella’s insights shed light on AI’s pivotal role in shaping the future of economies, underscoring the imperative of embracing innovation to unlock new opportunities and drive sustainable growth.

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Transparency in Loan Disclosure: Key Announcements by Reserve Bank of India

Discover how recent initiatives by the Reserve Bank of India are enhancing financial transparency in loan disclosure, advancing Central Bank Digital Currency projects, and strengthening Aadhaar-enabled payment systems. Stay informed about key developments shaping India’s financial landscape.

In its first Monetary Policy Statement of 2024 on February 8, 2024, the Reserve Bank of India (RBI) unveiled several significant measures aimed at bolstering financial stability and promoting transparency in the Indian financial system. These measures are poised to have far-reaching implications for various stakeholders, including electronic trading platforms, gold price hedging, loan transparency, digital payment authentication, and the evolution of central bank digital currency (CBDC). Let’s delve into the key announcements made by the RBI and their potential impact.

Review of Regulatory Framework for Electronic Trading Platforms:

The RBI announced a review of the regulatory framework governing electronic trading platforms in response to evolving market dynamics and technological advancements. The revised framework aims to address emerging challenges and enhance regulatory oversight to ensure the integrity and efficiency of electronic trading platforms.

RBI: Financial Transparency in Loan Disclosure

Expansion of Gold Price Hedging in OTC Market:

In a move aimed at providing greater flexibility to resident entities, the RBI announced the expansion of gold price hedging options in the over-the-counter (OTC) market at the International Financial Services Center (IFSC). This measure is expected to enable resident entities to mitigate their exposure to gold price fluctuations more effectively, thereby enhancing risk management capabilities.

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Enhanced Transparency in Loan Disclosure:

To empower borrowers with comprehensive information, the RBI extended the requirement of Key Fact Statement (KFS) to cover all retail and MSME loans. The KFS will provide borrowers with essential details such as the all-inclusive annual percentage rate, facilitating informed decision-making and promoting transparency in lending practices. That was why banks were under pressure after the RBI policy announcements as it will lead to put pressure on their margins.

Strengthening of AEPS Security Measures:

Acknowledging the pivotal role of Aadhaar-enabled payment systems (AEPS) in promoting financial inclusion, the RBI announced measures to enhance the robustness of AEPS security mechanisms. The proposed initiatives aim to streamline the onboarding process for AEPS service providers while implementing additional fraud risk management measures to safeguard against potential threats.

Introduction of Principle-Based Authentication Framework:

In a bid to adapt to the evolving payment landscape, the RBI proposed a principle-based framework for the authentication of digital payment transactions. This initiative seeks to facilitate the adoption of alternative authentication mechanisms beyond SMS-based OTP, thereby enhancing the security and resilience of digital payment systems.

Advancements in Central Bank Digital Currency (CBDC):

Building on the existing CBDC retail pilot project, the RBI unveiled plans to introduce programmability and offline functionality in CBDC transactions. These enhancements will enable targeted transactions and facilitate payments in areas with limited internet connectivity, thereby expanding the utility and accessibility of CBDC.


The recent announcements by the Reserve Bank of India underscore its commitment to fostering financial stability, promoting transparency, and embracing technological innovations in the financial sector. These measures reflect a proactive approach towards addressing emerging challenges and fostering a resilient and inclusive financial ecosystem. As India’s economy continues on its growth trajectory, these initiatives are poised to play a pivotal role in shaping the future of the financial landscape, ensuring stability, efficiency, and inclusivity.

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RBI’s First Monetary Policy Decision of 2024: A Reflection on Stability and Progress

Discover the key highlights of RBI’s first Monetary Policy Decision of 2024, balancing inflation targets and growth objectives.

Reserve Bank of India (RBI) Governor Shaktikanta Das delivered its first Monetary Policy Statement of 2024 on February 8, 2024, outlining crucial decisions and strategies to navigate the economic landscape. Let’s delve into the key highlights and implications of this significant development.

Monetary Policy Decision:

The Monetary Policy Committee (MPC) opted to maintain the policy repo rate at 6.50%, aligning with efforts to manage inflation within the 4% target range while supporting growth. This decision reflects strong domestic economic activity and moderate inflation primarily attributed to food prices.

Global Economic Landscape:

Amidst global conflicts and uncertainties, the global economic landscape remains mixed, with signs of stability emerging. India’s economy, however, has shown resilience, buoyed by improved infrastructure, digital technology, and robust regulatory policies.

RBI's First Monetary Policy Decision of 2024

Economic Outlook:

India’s GDP growth for 2023-24 is estimated at 7.3%, marking the third consecutive year of growth above 7%. Various sectors, including agriculture, manufacturing, and services, are contributing to this momentum, with investment activity gaining traction supported by government expenditure and policy initiatives.

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Inflation Dynamics:

Headline inflation has moderated, averaging 5.5% during April-December 2023, with core inflation reaching a four-year low of 3.8% in December. The trajectory of inflation hinges on factors such as food prices, weather conditions, geopolitical tensions, and seasonal price corrections.

Monetary Policy Stance:

Maintaining a cautious and balanced stance, the RBI continues to prioritize interest rates as the principal tool of monetary policy, aiming to bring inflation back to the 4.0% target. Flexibility in liquidity management remains paramount to ensure orderly money market rates and financial stability.

Financial Sector Resilience:

The domestic financial system remains robust, with healthy balance sheets of banks and financial institutions. Emphasis is placed on governance, risk management, compliance culture, and customer protection to uphold safety and stability.

External Sector Dynamics:

India’s current account deficit has significantly decreased to 1.0% of GDP in Q2 2023-24, with services and remittances maintaining a surplus. India’s foreign exchange reserves stand strong at US$622.5 billion as of February 2, 2024, reflecting resilience in the external sector.

Additional Measures:

The RBI announced several measures aimed at enhancing regulatory frameworks, facilitating hedging mechanisms, and strengthening payment systems to promote transparency, efficiency, and security in financial transactions.

Liquidity Management:

Effective liquidity management is crucial for maintaining financial stability. Governor Das elaborated on the RBI’s strategies to manage liquidity conditions efficiently. These measures aim to ensure the smooth transmission of monetary policy and support the functioning of financial markets.

Forward Guidance in Monetary Policy Statement

Providing forward guidance is essential for market participants to gauge the future direction of monetary policy. Governor Das hinted at the RBI’s stance on future policy actions, emphasizing a data-driven approach and flexibility to respond to evolving economic dynamics.


The Monetary Policy Statement by RBI Governor Shaktikanta Das reflects a balanced approach aimed at fostering economic stability and growth. While maintaining the status quo on interest rates, the central bank remains proactive in addressing inflationary pressures and supporting economic recovery. Market participants and stakeholders will closely monitor developments in the coming months as the economy navigates through challenges and opportunities.

As India confidently progresses on a transformative growth trajectory, the RBI reaffirms its commitment to reducing inflation to the target of 4% while ensuring price and financial stability. Continuous vigilance and holistic policy approaches will be instrumental in sustaining higher growth and stability.

In summary, the first Monetary Policy Statement or Monetary Policy Decision of 2024 reflects the RBI’s unwavering dedication to fostering economic stability and progress, laying the groundwork for a prosperous future.

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Navigating Global Interest Rate Fluctuations: How Emerging Markets Are Holding Up

Resilience Amidst Volatility: Diminished Sensitivity to Global Rates

In recent months, the global interest rate landscape has been tumultuous, particularly affecting longer-term government bonds. While yields on 10-year US Treasuries are rebounding from a 16-year high of 5 percent in October, interest rate movements in other advanced economies have been similarly pronounced.

However, amidst this volatility, major emerging markets have demonstrated notable resilience. IMF’s latest Global Financial Stability Report reveals that the sensitivity of the 10-year sovereign yield of Latin American and Asian emerging markets to US interest rates has significantly diminished compared to the taper tantrum in 2013.

Global Interest Rate: Factors Driving Resilience

This reduced sensitivity can be partly attributed to the divergence in monetary policies between advanced economies and emerging markets’ central banks over the past two years. Nevertheless, it challenges prior findings suggesting substantial spillovers from advanced economies’ interest rates to emerging markets. Notably, major emerging markets, particularly in Asia, have proven to be more insulated from global interest rate volatility than historical trends might imply.

Indicators of Resilience

Several indicators highlight this resilience. Exchange rates, stock prices, and sovereign spreads in major emerging markets have experienced modest fluctuations. Crucially, foreign investors have not withdrawn from their bond markets, as observed in previous episodes of global interest rate volatility, including as recently as 2022.

Navigating Global Interest Rate Fluctuations: How Emerging Markets Are Holding Up

Strengthened Policy Frameworks: Building Resilience

This resilience is not mere happenstance. Many emerging markets have dedicated years to fortifying their policy frameworks against external pressures. They have bolstered currency reserves, refined exchange-rate arrangements, and embraced exchange-rate flexibility. Moreover, improvements in the structure of public debt and increased confidence among domestic savers and investors in local currency assets have reduced reliance on foreign capital.

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Enhanced Central Bank Independence

Additionally, major emerging markets have enhanced central bank independence and credibility, in line with IMF recommendations. Since the onset of the pandemic, central banks in these countries have implemented timely tightening measures, effectively steering inflation toward target levels.

Facing Challenges Ahead: Potential Risks

Despite these successes, policymakers in major emerging markets must remain vigilant as they face several challenges ahead. Narrowing interest rate differentials may trigger capital outflows from emerging market assets to those in advanced economies. Quantitative tightening by major advanced economies could further dampen emerging market capital flows. Moreover, volatile global interest rates, influenced by investors’ reactions to central banks’ data dependency, pose risks to emerging market asset prices.

Projected Slowdown

A projected slowdown in emerging markets, as indicated by the latest World Economic Outlook update, could compound these challenges, particularly through financial channels. Frontier emerging markets and lower-income countries face even greater hurdles due to limited external financing and high borrowing costs.

Opportunities Amidst Challenges: Growth Potential

Nevertheless, amidst these challenges lie opportunities for emerging markets. Expected growth rates remain higher than those of advanced economies, and capital flows to stock and bond markets continue to be robust. Furthermore, policy frameworks are continually improving.

Strategies for the Future: Maintaining Credibility

To navigate through these challenges, emerging markets should maintain their policy credibility, commit to inflation targeting, and remain vigilant in the face of global interest rate volatility. Implementing macroeconomic tools such as currency intervention and macroprudential measures will be crucial. Frontier economies and low-income countries should strengthen engagement with creditors and rebuild financial buffers to regain access to global capital. Ultimately, countries with credible fiscal plans and monetary policy frameworks will be better positioned to weather periods of global interest rate volatility.

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