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The Reserve Bank of India (RBI) in the Monetary Policy Committee’s (MPC’s) statement on Friday is expected to announce another rate hike by 35-50 basis points to tame the inflationary pressure and protect against further rupee depreciation. The second bi-monthly meeting of the RBI MPC started on Wednesday and Governor Shaktikanta Das will announce the Monetary Policy Committee decisions on Friday morning.
The current hike is expected to drive the repo rate either equal to or above the pre-pandemic level. If done, this will be RBI’s third rate hike in the current financial year.
House Speaker Nancy Pelosi in Japan on Friday said that the US will not ‘not allow’ China to isolate Taiwan. This came after China deployed scores of planes and fired live missiles near Taiwan on Thursday in its biggest-ever drills in the Taiwan Strait, a day after Pelosi’s trip to the island nation. Taiwan’s defence ministry said it scrambled jets to warn away 22 Chinese fighter aircraft that crossed the Taiwan Strait median line into its air defence zone.
The International Monetary Fund (IMF) has recommended that India should gradually withdraw its fiscal and monetary policy stimulus, develop export infrastructure, and negotiate free-trade agreements with key trading partners to provide a sustainable boost to exports to maintain external sector balance at a comfortable level over the medium term.
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