Why in News?
- RBI Governor Sanjay Malhotra stated that interest rates are likely to remain low for a long period, citing that the Indian economy is currently in a “Goldilocks phase.”
Goldilocks Phase
- A phase where the economy is “just right”, neither Overheating (high inflation), nor Slowing down (low growth)
Key Features of a Goldilocks Economy
- Steady and robust economic growth
- Low and stable inflation
- Moderate, manageable interest rates
- Allows policy continuity without aggressive interventions
Why RBI Can Keep Rates Low
- Inflation remains within or below RBI’s target range
- Growth momentum is strong but non-inflationary
- Monetary conditions support: Investment, Consumption and Credit growth
Policy Significance
- Goldilocks phase gives RBI policy space to:
- Maintain accommodative or neutral stance
- Avoid frequent rate hikes or cuts
- Reflects success of inflation targeting framework
La Excellence IAS Academy, the best IAS coaching in Hyderabad, known for delivering quality content and conceptual clarity for UPSC 2025 preparation.
FOLLOW US ON:
◉ YouTube : https://www.youtube.com/@CivilsPrepTeam
◉ Facebook: https://www.facebook.com/LaExcellenceIAS
◉ Instagram: https://www.instagram.com/laexcellenceiasacademy/
GET IN TOUCH:
Contact us at info@laex.in, https://laex.in/contact-us/
or Call us @ +91 9052 29 2929, +91 9052 99 2929, +91 9154 24 2140
OUR BRANCHES:
Head Office: H No: 1-10-225A, Beside AEVA Fertility Center, Ashok Nagar Extension, VV Giri Nagar, Ashok Nagar, Hyderabad, 500020
Madhapur: Flat no: 301, survey no 58-60, Guttala begumpet Madhapur metro pillar: 1524, Rangareddy Hyderabad, Telangana 500081
Bangalore: Plot No: 99, 2nd floor, 80 Feet Road, Beside Poorvika Mobiles, Chandra Layout, Attiguppe, Near Vijaya Nagara, Bengaluru, 560040