The arguments against an RBI rate hike
A no-action policy with neutral policy stance cannot be ruled out but accompanied by a hawkish language and even a marginal rise in the inflation projection for the second half of the fiscal year
In June, the Reserve Bank of India (RBI) raised its repo rate by a quarter percentage point to 6.25%, endorsed by all six members of the Indian central bank’s rate setting body, the monetary policy committee (MPC). The rate hike and a marginal increase in its inflation projection notwithstanding, the stance of the monetary policy was left unchanged—neutral. Which meant that RBI was not willing to signal a rate hiking cycle in India.