Incentivising credit flows will be focus of RBI monetary policy: Expert

Saugata Bhattacharya

The balance of probability is that the Monetary Policy Committee (MPC) will pause in policy repo rate cuts (after a series of cuts from 6.5 per cent in early February 2019 to 4 per cent). Yet, a further but shallow cut is not ruled out.

The outcome will depend on MPC’s reading of multiple input decisions — but dominantly the trade-off between growth contraction and (for an inflation targeting MPC, the optics of) the persisting higher than mandated inflation, despite largely created by supply disruptions. Reserve Bank of India’s surveys of various economic indicators …

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