RBI's challenges

High core inflation and weak transmission key hurdles

The main takeaway from the last monetary policy review of the Reserve Bank of India in February was a growing realignment between the financial stability concerns of the central bank and the economic growth concerns of the Central government. In that sense, the first policy review under RBI Governor Shaktikanta Das was a significant milestone after several months of rather acrimonious interaction between the two sides. The Monetary Policy Committee’s (MPC’s) decision in February had two key elements: The repo rate was cut by 25 basis points; and the MPC altered the RBI’s policy stance from “calibrated tightening” to “neutral”