Strategy, stance: The fine dictum in RBI policy

The RBI policy statement of status quo has a clear distinction between policy strategy and policy stance and can coexist simultaneously. While a policy strategy may indicate RBI calibrating the liquidity normalisation to ensure that government borrowings face no disruption, the policy stance may still indicate rate adjustment to quell inflation expectations should inflation surprise on the upside. Though the RBI has kept reverse repo rate unchanged, it has mentioned that gradual absorption of liquidity through VRRR auction has pushed up the operative overnight rate from 3.37 per cent to 3.87 per cent over the last six months. This will