RBI monetary policy: A hike in Aug but a long pause thereafter, says expert

Apart from inflation indicators, the committee will likely take into account several macroeconomic and financial market indicators (eg, oil prices, the INR, FII flows, monsoon trends)

India’s inflation dynamics have been particularly interesting in recent months. On one hand, headline CPI surprised to the downside, mostly reflecting low food inflation. On the other hand, core CPI accelerated during Q2 18 (April-June). 

Although core inflation is likely to soften from its current level, in the absence of a significant drop in oil prices or a material reversal of the recent uptick in services inflation, it likely will remain above the Reserve Bank of India (RBI’s) comfort zone for several months. Although the RBI is mandated to target headline CPI inflation, which is poised to move lower during