Data-dependent RBI remains on hold with a neutral stance: Expert

Clearly, RBI does not want to act in a knee-jerk manner in response to the sub-6% GDP out-turn in April-June

The RBI’s decision to remain on hold, while maintaining a neutral stance was in line with our expectations. As in the past, the monetary policy statement continued to highlight potential upside risks to inflation that could manifest on account of fiscal spill-over risks due to implementation of farm loan waivers, possible increase of salaries and wages by different states in the period ahead, international crude oil prices rising further, and possible firming of core inflation. In the post-policy press conference, Urjit Patel stated that the RBI would wait and watch the evolution of inflation over the next 6-7 months, given