Inflation warrior

RBI's next move will depend on the Budget

The monetary policy committee (MPC) of the Reserve Bank of India (RBI) surprised financial markets with its unanimous decision to not cut the policy repo rate on Thursday. Although economic growth has slowed sharply in recent quarters, which raised the expectation of another rate cut, the rate-setting committee had strong reasons to pause. As argued by this newspaper before, the only reason in favour of another rate cut was that a status quo policy could possibly unnerve the financial market. The yield on the 10-year government bond went up by 14 basis points. 

It is true that the pace of