Hoping it's a one-off.

Consumer Price Index (CPI) inflation in India has been trending down, reaching 3.5% in July and 3.7% in August (RI), which are within the government target of 4%, with a margin of 2% on either side, for the Reserve Bank of India (RBI) (ET). "Year-on-year inflation rate based on All India Consumer Prime Index (CPI) for the month of September, 2024 is 5.49%." But, this was because Food Price Inflation was 9.24% (Provisional). mospi.gov.in.  However, in its October meeting, "Five of the six members of the Monetary Policy Committee (MPC) voted to keep the repo rate unchanged at 6.5%,...RBI Governor Shaktikanta Das said." Mint. Prices of food are dependent on supplies which cannot be increased by the RBI. So, why didn't the RBI reduce its policy rate, which would allow banks to reduce the rate at which they lend, thus encouraging businesses and people to spend more by borrowing, which would boost profits and share prices? asked Vivek Kaul. Because sustained high prices of food would result in demands for higher wages and thus cause higher inflation generally. A negative real interest rate, which is "an interest rate adjusted to remove the effects of inflation" (Investopedia) during Covid has forced people to divert their savings to stock markets in search of higher returns. Long term bank savings have fallen which is restricting banks long-term lending such as for highly profitable housing loans. By sticking to its policy rate the RBI hopes to retain more money in long-term savings in banks by stemming the flow of investments into markets. Also, Governor Das completes his second term in December (wikipedia) and will not have to answer to the Finance Minister after he retires. A few days ago, Das said that "the economic activity in India remains strong, with the agricultural and services sectors doing well, brushing aside the chatter that the Indian economy is slowing." "The RBI, last month, retained its growth forecast for the current financial year at 7.2%." ET. The retirement party should be a jolly affair. "GDP is growing at 6.7%" but "Income growth has been anemic: casual and regular workers in 2023 earned a monthly wage 1% lower than in previous year, per and International Labor Organization report based on government data." Hindustan Unilever's net profit fell 2% in the September quarter, Reliance Retail's revenue dropped by 1% and Shoppers Stop "logged its second straight quarter in the red." "Nearly half of the top 100 listed firms that have reported earnings for the September quarter missed estimates by more then 4%, the highest since March 2020, according to Venugopal Garre and his colleagues at Bernstein." They are "hoping the slowdown is a one-off anomaly." Reuters. Hence, "Six years after India's shadow banking sector blew up, pockets of stress are building again, prompting firms to start pulling back amid scrutiny from the regulator." "These firms are grappling with an increase in bad loans, margin compression and intense competition for deposits, according to bankers and analysts." ET. Still predicting 7.2% growth. Were the fingers crossed? Maybe the toes.