The Monetary Policy Committee (MPC) maintained status quo on policy rates and stance in its December policy review, in line with expectations. The policy statement notes that high frequency indicators in Q3 are mixed and that winter sowing is lagging. For these reasons, we think that there are significant downside risks to the MPC’s Q3 and full year estimate. We now expect CPI inflation to average 4.75 per cent in Q4FY18. We expect CPI and core CPI to average around 4.5 per cent in FY19, excluding housing effects.RBI’s liquidity assessment seems conservative.
Source: Economic Times December 07, 2017 05:51 UTC