The Monetized Sip

The world of trade has shown us the crucial balance of demand and supply. The Monetary Policy Committee of India, at its recent meeting in the month of June has announced a pause on the repo rate. The much awaited pause after a year of monetary tightening comes in as a sigh of relief. The tightening, which was very much needed to curb inflation, has shown to be progressive and effective with an easing of consumer price inflation and a moderation of core inflation. It is also observed that all the categories of headline inflation have seen a dip. The discussions on liquidity fueled by the decision to withdraw 2000 INR notes in circulation has turned out to be positive.The variable repo rate and reverse repo rate auctions have put liquidation in check. The increase of GDP is aided by a raise in investments and net exports from the country. The acceleration of GVA is majorly driven by the rebounding of Industrial activities in an expanding spree. The analysis of demand looks to be strong and firm, while the metrics to evaluate urban demand shows resilient figures. The primary indicators of these being a robust demand in Passenger Vehicles, Domestic Air Passenger Traffic and a higher credit card out standings. The same can be seen in rural demand where two and three wheeler sales have increased, but however truck sales have subdued. The merchandise industry has narrowed down the trade deficit with a contraction in imports compared to exports. The service sector, as ever, has been on an accelerating trajectory. The volatility in global markets, geopolitical tensions and climate change concerns, could be considered as the major concerning factors for maintaining the growth trajectory. Considering this, the forecast of real GDP for 2023 to 2024 is seen to be following a declining curve spread across four quarters. The immunity of rabbi harvest despite adverse weather conditions seems to be promising the inflation moderation pathology. But, on a global level, the uncertainty in financial markets, and other crucial commodities such as crude oil, sugar, has put the headlined inflationary curve uphill across the quarters in its forecast. It is to be further noted that the pause on policy rate is to study the cumulative effect of the recent monetary tightening exercise. The net increase in FDIs as against net outflows shed a prosperous light on growth. The comprehensive settlements and technical write offs are now applicable to all the regulated entities. The First Loss Default Guarantee loans can be availed by the Fin Techs and its regulatory framework would be issued shortly. Instructions to issue e- RUPI vouchers to individuals by non bank prepaid payment instrument companies is allowed. The RBI has as well decided to issue prepaid Forex Ru-pay cards by banks in India for usage in ATM’s, PoS Machines, Online Merchants, etc. It can be concluded at large that the close momentum of monetary policy alongside fiscal policies is a crucial standpoint to pave pathways for the future generations that the nation holds. Now, you know why caffeine with economics is the most alerted combination, as coffee stands as the second most traded commodity after oil! So, let’s all raise our mugs and strike a toast to the resources and inputs that had gone in to get us the aromatic packed cup of awareness to perfection. Cheers! 

The monies that wait to get sowed is eager to sprout an invaluable commodity of short spanned life, unlike an ever lengthened lifeless mine, which in turn speaks to us and keeps us up!