Time to avoid the 'last hike'

Prior to the February Monetary Policy Committee (MPC) meeting, an overwhelmingly strong market consensus expected “one last hike” by the Reserve Bank of India (RBI). A very similar consensus of “one last hike” seems to be in place even before the April MPC meeting. However, one feels that arguments in favour of a pause in April are strong. Some of these arguments were flagged by the two MPC members, who voted against a rate hike even in February.

Admittedly, the last two monthly Consumer Price Index (CPI) prints were higher than expected. However, most forecasters, including the RBI, expect CPI