There had been two successive cuts, one to the tune of 50 basis points, and the other to the tune of 100 basis points, which brought the Key Repo Rate to 1.85% from 3.35%. It should also be noted that year on year inflation rate in March 2020 was at 2.9%. The accommodative stance was maintained for the last two years.
Thereafter, the MPC decided to embark on a normalisation process in the light of the pace of economic recovery and inflationary pressures. This means that the KRR is now being raised because the economic conditions warrant such a normalisation approach. International Economic Developments I will now provide you with an overview of global economic developments.