RBI Produces A No-Action Policy To End 2017, But What Does 2018 Hold

The Reserve Bank’s and the Monetary Policy Committee’s decision to do nothing at all to interest rates was widely anticipated and needs no defence. The second quarter GDP growth at 6.3 percent was higher than the first quarter’s growth of 5.7 percent.

consumer inflation at 3.58 percent in November was the highest in five months and is all set to rise beyond 4 percent this month and to 4.7 percent by March.

For an MPC targeting a 4 percent inflation on a sustained basis, a pause on rate cuts was a logical decision. Any clarity on the government’s borrowing programme for this year or the next will emerge only by the next policy. In that sense this policy was more of the holding-fort kind.

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