RBI is still very dovish, but will inflation really remain low?

The indication is that an accommodative stance will continue into the next year too, as long as inflation remains stable

The February credit policy review of the Reserve Bank of India (RBI) would not have been considered to be critical under normal conditions. But with the Union Budget projecting borrowing of Rs 14.95 trillion for fiscal 2022-23 (FY23) and not giving clear guidance on inflation, the markets went into a tizzy with the 10-year bond increasing by over 20 basis points (bps).

Subsequently, there has been volatility in the market and the announcement made on Tuesday that the Friday auction has been called off after considering the cash balances of the government, the impression gotten is that this year's