The wisdom of waiting: Why RBI held back despite inflation plunging

With inflation easing to 2.6%, RBI opts for caution, saving rate cuts for later

The October monetary policy — despite its remarkable inflation revision — was less a story of action than of careful inaction.

 

Inflation surprises in India often come dressed in the garb of oil shocks, monsoons, or sudden fiscal spurts. But this year’s shock has been of a very different kind – inflation has quietly tiptoed off the stage. And almost nobody saw it coming. At the start of the financial year, the RBI had placed its inflation forecast at 4 per cent — in line with its median target. But since then, a series of downward iterations have now brought