By Rajni Thakur

Monetary Policy Committee was faced with a complex landscape this time to make interest rate decisions for the economy. Growth has held ground through most of the current fiscal year, including upside surprises in Q1 and Q2. At the same time, lower food inflation has kept a lid on headline inflation.

On one hand, overshoot in growth had reduced the urgency for a rate cut, on the other, strain on liquidity from RBI’s forex intervention to stabilise the rupee had pushed bond yields higher, impeding transmission of earlier rate cuts. Markets were thus closely watching RBI’s communication at this point. Masterful balancing act

RBI announcements this morning managed to deliver it all. There was a rate cut, there were liquidity infusions, and also a dovish tone for further su

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