MPC to continue to wait & watch

The MPC is likely to stay on hold when it announces its policy decision next week

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RBI Governor Urjit Patel (second from right) with (from left) Deputy Governors B P Kanungo, N S Vishwanathan, and Viral V Acharya, after announcing the monetary policy in Mumbai on Wednesday | Photo: Kamlesh Pednekar

Anubhuti Sahay

Last Updated : Nov 29 2018 | 1:29 AM IST

The ongoing debate around India’s monetary policy is not whether the MPC will hike next week or not; but whether it will hike at all over the next twelve months or so. The reasons for such a debate are not surprising.

First, the Indian crude basket (ICB) is currently trading at levels (both in USD and INR terms) seen before the MPC hiked rates by 50bps. Second, even though a subdued CPI trajectory in the rest of FY19 is well anticipated, ongoing subdued food inflation has the potential to keep headline CPI muted in FY20 too. An uptick in food prices

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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