RBI monetary policy review: Clear sign that happy days are over

The monetary policy committee (MPC) has sprung some surprises even though the repo rate has been kept unchanged.

The Reserve Bank of India’s (RBI’s) policy review this time was always going to be special for several reasons. First is that after the optimism revealed in the February policy, things are looking very different. Russia's war in Ukraine has been a new exogenous force. The budgetary numbers were being discussed even before the year started, which means skepticism came in earlier. The currency has been volatile, though tamed by RBI intervention. The US Fed has increased rates and is now certain on quantitative easing (QE) rollback, and inflation perspectives look quite menacing.

The monetary policy committee (MPC) has sprung