Will we see a reverse repo hike this week?

Can RBI afford the luxury of waiting out on the inflation front to allow growth to pick up?

Many say the April 6-8 meeting of the Monetary Policy Committee (MPC), the rate-setting body of India’s central bank, will be its toughest since the outbreak of the Covid pandemic.

In its last meeting in February, just after the Union Budget, the MPC left the repo rate (at which the central bank infuses liquidity into the system) and the reverse repo rate (at which it sucks liquidity out) unchanged at 4 per cent and 3.35 per cent, respectively. It also committed to continue with the accommodative stance “as long as necessary to revive and sustain growth on a durable basis”.

While both