A watchful pause

MPC is prepared to act if required

The outcome of the meeting of the Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) on Thursday checked all the necessary boxes. As was widely expected, the six-member committee left the policy repo rate unchanged at 6.5 per cent, despite the anticipated surge in the Consumer Price Index-based inflation rate at least for July and August. The MPC, in fact, also revised its inflation projection for the second quarter of this financial year to 6.2 per cent, which is higher than the upper end of the tolerance band. However, in spite of the expected surge, the MPC rightly decided