Latha Venkatesh is the Banking and Commodities Editor at CNBC TV-18. As a key anchor with the channel, Latha is a keen observer of the monetary policy space. She has kept close watch on the Reserve Bank of India’s policy formulations and developments in the banking industry. She also tracks money market and macroeconomic trends
The decision to track CPI can mean a much more hawkish RBI that we are prepared for. Not only is headline CPI at 9.5%, non-food CPI has been sticky at 8.7%. So even assuming food inflation drops rapidly in the last quarter of 2013, headline CPI may remain well above 8%. In which case RBI may go for 2 more rate hikes.
The government's intransigence on diesel prices should therefore be highlighted by the RBI. They may still give a cut, but they must express dissatisfaction over the refusal of the government to keep its word that diesel prices will be hiked every month. #PolicyWatch#Rate cut#RBI