The immediate impact of the Reserve Bank of India (RBI) Monetary Policy Review has not been negative. The market was braced for a 25 basis hike. The policy statement projects somewhat heightened inflation, but is otherwise positive in its outlook. The central bank expects growth to stay on track.
Inflation is still at acceptable levels. But it is climbing. Crude oil prices are volatile and likely to rise. The rupee is taking a beating. The fact that several banks had chosen to hike rates ahead of the review tells us that the cycle has switched.
This is the first rate
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