RBI policy: Current inflationary environment does not allow for a rate cut

Risk of inflation, especially from crude oil prices, will continue to draw emphasis and be a major factor. A hike is not at all warranted.

The Reserve Bank of India's six-member Monetary Policy Committee is set to meet on December 5-6 for the fifth bi-monthly policy review. The central bank is unlikely to change repo rate. Some bankers and economists are also expecting status quo on repo rate. This author discusses why the RBI should not cut rates right now. 

RBI had maintained status quo on policy rates in its last review. It cited risks due to higher inflation, largely emanating from rising crude oil prices, uneven distribution of monsoon and amplified global geopolitical uncertainty. Other factors included increased volatility in financial markets as