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Informist, Wednesday, Oct. 7, 2026

MUMBAI - Indranil Pan, chief economist, YES Bank, said the following on the Reserve Bank of India's fourth bi-monthly monetary policy statement for 2026-27 (Apr-Mar) detailed Wednesday:

As expected, with the uncertain geopolitical developments that have kept oil prices elevated and given that the inflation numbers have registered an upward trend, it was prudent for the RBI to have started its hiking journey. The increase in the growth outlook indicated that the fear of growth sacrifice due to a rate hike cycle is now low. A bit surprising was the change in stance to 'calibrated tightening', despite an acknowledgement that currently there are 'limited signs of supply-side pressures getting embedded in pricing behaviour'.

Further, the RBI did not find any significant demand-side pressures while, in the same breath, acknowledged that credit growth was high. The 'calibrated tightening' was explained to mean that the future trajectory of rates is a pause or a hike. All policies remain live; a hike of 25 bps in the December meeting is a certainty now. The RBI will continue to remain data-dependent and factor in the breadth of inflation pressures in the months ahead to determine the cumulative dose of hikes. Given that the RBI now sees the Q1 FY28 inflation print at 5.6%, a total of 100 bps may be needed in this cycle.  End

Compiled by Arya S. Biju

Filed by Avishek Dutta

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