Statsguru: MPC holds interest rates; inflation expectations also firm up

The decision to maintain the status quo was made against the backdrop of the retail inflation rate, measured by CPI, rising for the sixth consecutive month in December

In a recent meeting, the monetary policy committee (MPC) chose to keep the repo rate unchanged at 6 per cent (Chart 1). The decision to maintain the status quo was made against the backdrop of the retail inflation rate, measured by the consumer price index (CPI), rising for the sixth consecutive month in December (Chart 2).
 
The consumer food price index has surged of late, rising from 1.3 per cent in September to 5 per cent in December. But, even the core inflation rate, which excludes food and fuel, has edged upwards, after the implementation of higher house rent