Question

Read the following text carefully from ‘The Economic Times’ dated 8th June, 2023: 
{“The Reserve Bank of India’s (RBI’s) rate-setting panel unanimously decided to keep the benchmark lending rate unchanged at 6.5%. The committee voted to remain focused on the withdrawal of accommodative monetary policy.”} 
On the basis of the given text and common understanding, answer the following questions: (a) Identify and discuss the economic issue indicated in the above text.

Hint:

RBI’s monetary policy decisions balance inflation control and economic growth.

Answer 1

Monetary Policy Decision: The RBI decided not to change the lending rate, indicating a cautious approach to prevent inflationary pressures while ensuring economic growth. 
Withdrawal of Accommodative Policy: This signals a shift toward controlling liquidity in the economy to stabilize inflation.