Page 3 - Aditi Nayar

RBI monetary policy: Rates on hold amid uneasiness on inflation

The committee highlighted that inflation risks emanate from supply chain disruptions, high vegetable prices, increased taxes on fuels, and volatility in financial markets

Unsavoury implication of GDP numbers: Slowdown has not bottomed out

The MPC may well undertake a final rate cut in FY2021

GDP growth expected to print sub-6.5% in FY20: ICRA's Aditi Nayar

Government spending was the key driver of GDP growth in Q1 FY20. The outlook for the same appears somewhat mixed

MPC showed continuity: Aditi Nayar

There was continuity in other parameters such as the stance on neutral systemic liquidity

GDP growth in line with expectations

Further monetary easing in 2016 likely to be limited to 25 bps

However, the hasty rise in retail inflation in April to 5.4 per cent confirms that the RBI's decision not to front-load a larger rate cut was indeed appropriate