Economy & Business Current Affairs - 2026-09-13

Background: The Reserve Bank of India (RBI) typically reviews its monetary policy every two months to manage inflation and support economic growth. The Monetary Policy Committee (MPC) has the authority to set the repo rate, reverse repo rate, and other key policy instruments. Current Context: In its latest bi-monthly review on September 12, 2026, the RBI's Monetary Policy Committee decided to keep the repo rate unchanged at 5.75%. This decision was primarily driven by concerns over persistent inflation, particularly in food and energy prices, despite some moderation in core inflation. The committee aims to ensure that inflation progressively aligns with the target while supporting growth. Impact: This decision is expected to maintain stability in lending and borrowing costs for businesses and consumers. It signals the RBI's commitment to its inflation-targeting mandate, potentially encouraging continued investment and consumption, while also keeping a close watch on inflationary pressures.

Background: The Index of Industrial Production (IIP) is a key indicator that measures the growth rate of various industries in the economy. It is released monthly by the National Statistical Office (NSO). Current Context: Provisional data released on September 11, 2026, indicates that the IIP for July 2026 grew by 4.2% compared to the same month last year. This growth was primarily driven by a robust performance in the manufacturing sector, which expanded by 4.5%, and a moderate increase in the mining sector by 3.8%. However, the electricity sector saw a marginal slowdown. Impact: The modest growth in IIP suggests a gradual recovery in industrial activity, providing a positive signal for economic sentiment. This could lead to increased employment opportunities and higher corporate earnings, contributing to overall economic expansion. However, the uneven performance across sectors highlights the need for continued policy support.