The Reserve Bank of India (RBI) has cautioned against rapid monetary easing due to persistent high food inflation and structural economic issues. The RBI has revised its GDP growth forecast for FY25 to 7.2% from 7.3% and highlighted concerns over a peak credit-deposit ratio and sluggish deposit growth, which threaten financial stability.
Despite strong capital levels, the RBI is wary of structural liquidity problems and rising credit costs, exacerbated by slowing retail lending and default risks. Governor Shaktikanta Das emphasized the need for cautious policy adjustments to safeguard economic progress and balance inflation control with growth and financial stability.
