Reserve Bank of India Governor Shaktikanta Das announced on Thursday that the monetary policy committee would leave the repo rate unchanged. What came as a surprise, though, is that for a second time in a row, the MPC refrained from presenting a forecast for inflation.
“The RBI, in our view, should have provided quarterly inflation forecasts, which would have given some idea about the future timing and depth of the ongoing rate easing cycle,” Deutsche Bank Research said in a report.
While the lack of a forecast in June was understandable given the uncertainty presented by the Covid-19 pandemic, the central bank should have had enough data by now to attempt a forecast, even if it were with an “uncertainty band”, Kaushik Das, director and chief economist India at the company, told BloombergQuint in an interview thereafter.
“I can keep saying what RBI should do, but in order to see what RBI will do a forecast would have helped,” he said. If one is to go by the central bank's commentary that they will wait till inflation reduces durably, the rate cut could be delayed as far as December, he said.
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