Expressing cautious stance again, ahead of the monetary policy, the Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty said the central bank would look at other variables, and not just the wholesale price-based inflation, when deciding monetary policy at its review on June 17. The deputy governor’s statement further enforces a hawkish tone and a rate-cut in the June 17 policy review looks little unlikely.
Though so far the RBI's main gauge of inflation remained wholesale prices, but the apex bank is also increasingly looking at consumer inflation and other variables such as the current account deficit (CAD) when determining policy.
Recently, the RBI in its annual monetary policy slashed the key interest rate by just 0.25% to 7.25% and kept the liquidity enhancing cash reserve requirement (CRR) unchanged. Further, justifying its stance, RBI Governor D Subbarao had said that the ‘monetary policy action, by itself, cannot revive growth. It needs to be supplemented by efforts towards easing the supply bottlenecks, improving governance and stepping public investment.’
Also describing the widening CAD and its financing as the biggest threat to monetary policy, the apex bank had warned that growth would slip if governance is not improved and supply constraints are not unlocked.
MoneyWorks4Me is a SEBI-registered Investment Adviser (IA) dedicated to helping investors build long-term wealth through transparent, research-driven, conflict-free guidance. Founded in 2008, we started our journey as a Research Analyst (RA), providing deep fundamental analysis, intrinsic value insights, and long-term investing frameworks for Indian equities. In 2017, we transitioned to a full-fledged SEBI-registered Investment Adviser, strengthening our commitment to acting as a fiduciary—always putting the investor’s interest first.
To become India’s most trusted, research-powered fiduciary advisory platform—where every investor, regardless of experience, can make calm, confident, and well-reasoned investment decisions.
MoneyWorks4Me ensures this through: