RBI Policy review: Another 25-bp cut looks likely

Another 25 bps cut looks likely on the cards in the second half of the year.

The credit policy is no longer a policy or view of the RBI but that of the Monetary Policy Committee. Being based on a consensus from a combination of internal and independent external experts, the flavour changes and dispels the common loosely held view that it can be influenced by external factors.

The decision to lower rates was expected even as the market has made it a habit to always buffer a rate cut every time a policy is announced. Prima facie, it appeared that with CPI inflation going below 2% there was strong reason to lower rates as the