RBI wastes Fed moment

.....Indeed, while Rajan said the MSF would do more of the walking as it went back to being 100 bps over the repo, his statement eschewed the usual RBI talk of core WPI which continues to fall, to December 2009 levels now. Instead, Rajan spoke of CPI that remains much higher. But since there is 125 bps of the MSF hike to still unwind, Rajan can hike repo rates for another policy or two while appearing to be cutting rates. Like his predecessor, Rajan underscored the government’s role in getting growth on track by talking of the expected diesel hike and clearances by the CCI. He did it more elegantly though, perhaps helped by gushing TV anchors at his press conference who, impressed with his plans to attract forex flows, asked whether he was prepared to be buying dollars when the rupee started to appreciate.

Read - FE