INSUBCONTINENT EXCLUSIVE:
Mumbai: A hike in interest rates might just be round the corner going by the minutes of the Monetary Policy Committee (MPC) released on
The common concern is the impact on inflation of the proposed hike in minimum support prices, fiscal concerns and the lagged impact of house
rent allowances as recommended by the pay commission
Besides, all acknowledge some revival in economic activity.
In his justification for a pause for policy rates, RBI deputy governor Viral
Acharya indicated that in his next policy review, he might shift its neutral liquidity stance to a move towards withdrawal of accommodation,
that recent softening in inflation is largely due to softening of vegetable prices which in turn has been volatile and seasonal in nature
rate, the repo rate which was kept unchanged at 6%
today's minutes suggest that a back-ended rate hike in 2018 remains a possibility, if headline inflation exceeds the trajectory set out by
meeting on April 6th by voting for a 25 basis points hike in key policy rates.
Even governor Urjit Patel has been cautious in his assessment
of inflation as inflation has moderated in recent months, several upside risks to inflation persist
Hence, I would like to wait for more data and watch how various risks to inflation evolve, going forward.
