RBI Monetary Policy: An interest rate cut emerges on the horizon

It is not often that central bankers put real interest rates at the heart of the monetary policy decision.

The Reserve Bank of India has kept interest rates unchanged for the second consecutive meeting of the Monetary Policy Committee.

With the repo rate remaining at 6.5%. Governor Shaktikanta Das suggested that the real interest rate meant a cut in policy rates was possible as the interest rate cycle may have peaked.

The inflation target mandate, a monetary policy objective aimed at controlling the rate of price increases,

Emerged in 2016 years of price increases led to negative real interest rates and spawned financial instability.