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Below Quote On Pre RBI Policy expectations By Pankaj Pathak, Fund Manager - Fixed Income, Quantum Mutual Fund

Since the last RBI policy, inflationary pressures have increased. Sharp jumps in vegetable prices have pushed expected inflation for the next 2-3 months above 6%. Cereal and pulse prices have also moved up. On this backdrop, the RBI should turn extra cautious at the upcoming MPC meeting.

 We expect the RBI to remain on hold and maintain its policy stance as a withdrawal of accommodation. They might raise their CPI inflation forecast for FY24 by 20–30 basis points to around 5.3%–5.4%.

A hawkish pause is widely expected and is already a part of the market psyche. The bond market will take cues from the RBI’s assessment of the current spike in food prices and its impact on the overall inflation outlook and monetary policy.

We expect that the RBI will look through the recent jump in food inflation and take comfort from the falling core CPI. Given the

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