A non-monetary policy, par for the course

In May, when the Reserve Bank of India (RBI) went for an out-of-turn policy rate cut for the second time in a row, paring its policy repo rate to a historic low of 4 per cent, the equity market gave it a thumbs-down and bond prices rose marginally. On Thursday, the RBI refrained from a rate cut but the equity market cheered the policy; the bond prices dropped but there was no big selloff. The reason behind the Monetary Policy Committee’s (MPC) consensus decision is the rise in inflation. For the same reason, the RBI governor’s statement doesn’t have any explicit forewor.....

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