Look beyond the repo rate

As the mid-quarter monetary policy review due on September 17 draws near, the usual speculation about the Reserve Bank of India’s (RBI’s) action is building up. There is a minority that hopes that the combination of sub-six per cent growth in the last two quarters and somewhat lower-than-expected inflation rates will persuade the RBI to drop the policy rate. The majority in the markets, however, expects no change — particularly in the absence of any visible efforts by the government to pare the fiscal deficit or improve the food-supply situation.............. 

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