It “underlines low inflation and high growth path for India for 2019-20.”Das pointed to a sharp a slowdown in inflation as justification for the 25 basis-point reduction, taking the repurchase rate to 6.25 percent. The MPC also reversed its policy stance to neutral from ‘calibrated tightening’ adopted in October.“Das has delivered what the Modi government was hoping for,” said Mark Williams, chief Asia economist at Capital Economics Ltd. in London. The decision was predicted by just 11 of 43 economists surveyed by Bloomberg News, with the rest expecting no change.The decision “restores growth maximization as a secondary objective of the RBI. “But there should be consistency in views over a period of time. The surprise this time was existing monetary policy committee members who voted for calibrated tightening stance in December and a cut in February.”

Source: Economic Times February 07, 2019 12:22 UTC