Economists at Australia and New Zealand bnaking group (ANZ) provide their afterthoughts on the Reserve Bank of India’s (RBI) surprise policy move on Thursday.

“The monetary policy committee (MPC) delivered a surprise pause against expectations of a 25bp hike, citing a need to assess the impact of previous hikes amid an uncertain economic environment.”  

“For FY24, the growth forecast was nudged up by 10bps to 6.5% and the inflation projection trimmed by 10bps to 5.2%. Lower oil price assumption was cited as the reason for the improved growth-inflation outlook.”   

“We believe that India’s rate hike cycle is over for now. However, by maintaining its “withdrawal of accommodation” stance, the MPC has preserved the scope for further hikes, if needed. Upside inflation risks from a surge in oil prices and poor monsoon will be on our radar.”