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Below is Perspective on RBI policy action By Mr. Nish Bhatt, Founder & CEO, Millwood Kane International.

low-rate (party) ends after two years

“In a surprise move the central bank hiked rates to keep the runaway inflation in check. It was deja vu of sorts as the RBI announced policy action that was out of their regular meeting calendar, as they did in May 2020.

The hike in the repo rate is aimed at easing the high pressure of inflation. Whereas the hike in CRR is to unwind the easy monetary policy and drain the excess liquidity out of the system. The Governor's observation of food inflation is a cause of concern. RBI's assurance that the next steps will be calibrated and keeping in mind the economic recovery provides a positive line of direction along with the policy stance that is kept unchanged at 'Accommodative.”

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