RBI may hold rate on ambiguous growth, moderate inflation: Expert

The expansionary implications of the FY20 Budget fiscal measures need to be better understood

Is there room or even a need for the MPC to cut the repo rate? The MPC will likely (and rightly) revert to a “neutral” stance, back from the “calibrated tightening”. Sections of analysts are now also expecting a repo rate cut to boost economic activity. This might be premature.

First, under reasonable assumptions, our projections indicate that inflation will average 3 per cent in Q4FY19 and 4.1 per cent in FY20, ie, close to the inflation target. Crude oil is expected to remain in $60-65 per barrel range, based on signs of a global slowdown, but the sharp recent rise