The first monetary policy of 2019 was also the first by the new governor at the helm of the Reserve Bank of India (RBI). This policy also came on the heels of what many analysts have dubbed an “expansionary budget" and a monetary policy committee (MPC) stance that was in calibrated tightening mode. Aside from the unexpected rate cut, the two big takeaways for us were the steep downward revision in the expected inflation trajectory and the subtle reference to the need to support growth even as inflation impulses remain well-controlled. The need to support growth was emphasized strongly as inflation objectives were in control. The MPC notably referred to a growing slack in the economy and the need to support private consumption and investment.

Source: Mint February 07, 2019 19:41 UTC