Statsguru: Is RBI's status quo justified?

Despite the growing clamour for a rate cut, the monetary policy committee (MPC) of the RBI chose to maintain the status quo in its latest policy review. The benchmark repo rate remains at 6.25 per cent, as shown in Chart 1.



But the recent economic data make it difficult to justify the policy stance.

On the inflation front, the consumer price index (CPI) dropped to 3 per cent in April, with even the core inflation rate declining marginally to 4.4 per cent, as shown in Chart 2.

Excluding petrol and diesel captured in the transportation segment,