Repo rate status quo shows RBI's continued focus on inflation over growth

Monetary policy support to growth will be limited

Official estimates released recently showed that the Indian economy was growing significantly slower than the rate projected by the Reserve Bank of India (RBI). The economy expanded 5.4 per cent in the second quarter this financial year as against the RBI’s projection of 7 per cent for the same period in its October monetary-policy review. Some analysts have argued that the delay in policy-rate reduction by the Monetary Policy Committee (MPC) was partly responsible for the loss of momentum. Top government functionaries also argued for lower policy interest rates in recent weeks. Given the backdrop, the MPC did well to