The Monetary Policy Committee (MPC)'s decision today is going to be a close call. There is definitely an upsurge in perceived risks, thanks to higher oil prices, a wider current account deficit (CAD), and a weaker rupee. On the flip side, oil prices have slipped down, dissipating some of perceived risks such as high inflation, CAD and rupee. Most economists and analysts still believe that the country's growth-inflation dynamics does not warrant an immediate rate hike as of now, though the risks may prompt the MPC to turn more hawkish. Interestingly, there is unanimity in the belief that a rate hike is imminent.

Source: dna June 05, 2018 21:33 UTC