Growth on strong footing, further tightening needed: RBI report

On the exchange rate, the report said the rupee was holding its poise, with adequate supplies of dollars

The economy is poised to shrug off the modest tapering of the growth momentum in the first quarter, according to the Reserve Bank of India’s (RBI’s) state of the economy report, which has also hinted at a further tightening of the monetary policy, with the emphasis being on keeping inflation expectations anchored.

“… front-loading of monetary policy actions can keep inflation expectations firmly anchored and reduce the medium-term growth sacrifice,” it said.

The economy grew 13.5 per cent, lower than the RBI’s estimate of 16.2 per cent, in the first quarter this fiscal year.

“Inflation remains elevated and above the