The Reserve Bank of India faces a tough choice: support growth through lower interest rates or stabilise the rupee to restrict capital flight. With inflation still a concern, foreign investors retreating, and rising global uncertainties, striking the right balance has never been more challenging.The latest 25 basis-point rate cut by the Monetary Policy Committee was in line with the government’s push to revive consumption. More easing would risk further foreign institutional investor selling. The central bank’s next moves will test its ability to safeguard macroeconomic stability.
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