Cautious RBI likely to hold rates amid inflation and global risks
Core inflation, excluding food and fuel, remains lower. In fact, core inflation is at a low of 2.9%, if we strip off precious metal prices from the index. While monetary policy cannot control supply-side inflation, the central bank would be wary of higher food, fuel and input prices getting entrenched in the system, resulting in higher household inflationary expectations and broad-based inflationary environment.
