Future trajectory: Policy rate cut uncertain despite cooling inflation

The decision at the December MPC meeting will depend on a range of factors, and the incoming data until then will be crucial in shaping the consensus view

The data released last week showed that the consumer price index-based inflation rate declined to a 99-month low of 1.54 per cent in September. This has increased market expectations of a policy repo- rate cut in the December meeting of the Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC). The minutes of the last MPC meeting, also released last week, showed that members were of the view that the space for policy support had opened up. However, the decision at the December MPC meeting will depend on a range of factors, and the incoming data until then