Hedging strategies before monetary policy meet

September fuel inflation is likely to be high, since crude prices have moved up. Food inflation would remain moderate

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Close yet far: While growth is picking up cyclically, it may not sustain. Even without a change in the policy rate, market interest rates (and bank lending rates) have moved higher

Devangshu Datta

Last Updated : Sep 19 2018 | 11:50 PM IST

The next three weeks will see traders making two-way bets on the Monetary Policy Committee (MPC) policy review of October 3-4. Until the release of the August inflation numbers, consensus opinion was inclined towards a likely hike.

However, the August inflation numbers were low. The Consumer Price Index (CPI) showed 3.69 per cent advance year-on-year over August 2017. The Wholesale Price Index showed 4.53 per cent, year on year (Y-o-Y). Both numbers suggested a dip in the Y-o-Y inflation trendline, which was at 4.17 per cent (CPI) and 5.09 per cent (WPI) for July 2018.

The most obvious reason is

Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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