Time to cut rates

Reasons for caution have evaporated over time

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will meet next Wednesday to review the central bank’s policy stance. The RBI has chosen largely to be cautious over the past months; it has not cut the policy rate since the first meeting presided over by Governor Urjit Patel last October. However, the minutes of the MPC’s last meeting suggest that the committee’s members are, in fact, more flexible than a straightforward reading of their actions since October would suggest. Certainly, the reasons why a rate cut might be possible – and, indeed, should be undertaken –