Status quo on policy: Is this the end of the Reserve Bank's easing cycle?

With the rise in inflation from the fourth quarter, possibility of another rate cut uncertain, unless growth plays spoilsport

The Reserve Bank of India’s (RBI’s) actions in its August monetary policy were on expected lines.

 

After a cut of one percentage point in the policy repo rate in three tranches — between February and June — the Monetary Policy Committee (MPC), the six-member rate-setting body of the RBI, on Wednesday decided to leave the rate unchanged at 5.5 per cent. The “neutral” monetary policy stance was also kept unchanged. Both these MPC decisions, announced after a three-day meet, were unanimous.

 

The RBI had changed its stance from “accommodative” to “neutral” after cutting the policy rate by half a percentage