Monetary policy: RBI may explore prudent measures to raise credit offtake

It is now fairly obvious that Monetary Policy Committee (MPC) will choose to pause, adopt a watch and wait mode at this review. The MPC’s inflation targeting mandate will not allow otherwise, given multiple economic and policy indicators now publicly available. 

After the 7.35 per cent December CPI inflation print, we expect the January inflation once again to be close to 7 per cent, and then recede down to around 6 per cent for some months. While many vegetables prices have come off, other components of the food basket are creeping up.  In addition, Customs duties on a host of