 "To cut rate or not?")
The Reserve Bank of India (RBI)'s fourth monetary review, under Governor Urjit Patel, is scheduled next month. Will it cut rate, or won't it?
Reasons against
Inflation: A sharp decline in retail inflation in August might not allay fears
FCNR (B) deposit maturity: Sep-Nov. If FCNR outflow adds up with general outflow after rate cut, it would be disastrous
US elections: In November. Has ramifications for global economy that RBI needs to account for
7th Pay panel award: Could lead to spike in inflation
Reasons in favour
Inflation: Fall is sharper than expected
IIP numbers: Depressing contraction would make the industry lobby, and finance ministry, push for a rate cut
Correct timing: Waiting for next policy in December could be bad timing, with uncertainties over US Fed
Reserve's impending decision
