RBI may hold rates again in June; monsoon, crude key

The Reserve Bank of India’s Monetary Policy Committee (MPC) is likely to hold interest rates steady in its June policy review with a unanimous vote to maintain the status quo, given that the cumulative rate hikes since last May appear sufficient to tackle inflation. However, there are two caveats: Truant monsoons should not stoke inflation in farm-gate prices, and crude oil should not rally. Additionally, analysts have suggested that the unchanged stance reflects the panel’s flexible approach towards rates, should inflation unexpectedly accelerate.