Others, however, believe that inflation will persist above the MPC’s target of 4 per cent for a longer period due to volatile global crude prices, affect of domestic telecom tariff hikes and firming up commodity prices.
In other words, rather than rate cuts, MPC may be forced to adopt a neutral policy stance, sooner or later.
At 7.5 per cent, both retail inflation and FY20 nominal growth printed at the same pace, which is a first in at least eight years.
Besides, the chasm between inflation and core inflation widened and is now the highest since May 2013.
Real rates have turned negative at 220 bps and the possibility of fiscal slippage in FY20 is a signal that the rate easing cycle has come to an end.