Monetary policy review: RBI to hike repo rate by 25 bps in Oct, says expert

From August to now, Indian crude oil basket has moved up by around 12% , while INR depreciated by 6%

After the RBI had raised the repo rate for the second time in this cycle in August, the general market sentiments veered towards no further tightening by the RBI, especially as the monetary policy stance stayed “neutral”. A significant lot has transpired domestically as also internationally from 01 August to today. 

First, between August and now, the Headline CPI inflation has definitely come down, registering only 3.7% as per the last reading. In a normal scenario, the RBI should have been sitting comfortably — having pulled down the Headline number below the 4 per cent handle. The core inflation also has