Central bank dithers

RBI's status quo is a disappointment

The Reserve Bank of India (RBI) seems to have taken an over-cautious stand by opting for a status quo on interest rates. In its first bimonthly policy of the current fiscal year, the RBI’s inflation projection is 2-3.5 per cent in the first half of the year and 3.5-4.5 per cent in the second half. This is substantially lower than its earlier projection of 4.5 per cent in the first half of FY18 and 5 per cent in the second half. At the same time, the forecast on gross value added (GVA) growth has been mildly reduced to 7.3 per