No change in rate; will the stance change?

Both the US Fed and Bank of England have taken the tightening bias off the table. Will the RBI follow the same path?

In the last meeting of the Reserve Bank of India’s (RBI’s) rate-setting body, the Monetary Policy Committee (MPC), in December, there was no change in the interest rate or the policy stance. For the fifth meeting in a row, the repo rate remained unchanged at 6.5 per cent and the stance stuck to “withdrawal of accommodation”.

What has changed since?

Let’s look at the domestic scene.

The retail inflation track was a positive surprise in December — 5.69 per cent, led by lower vegetable inflation. What’s more, the non-food, non-oil core inflation has remained soft. After dropping to a four-month low of 4.87