The final monetary policy review by the RBI in 2022 likely to be as unpredictable as the final policy review was in 2021
Download Report6 reasons for RBI to pivot its monetary policy
The final monetary policy review by the RBI in 2022 is likely to be as unpredictable as the final policy review was in 2021. During the course of last one year, the debate on monetary policy shifted from the need for a timely start to accelerated tightening. We continue to expect the RBI to deliver a 35 bps rate hike (nearly a consensus call) in its policy review on Dec 7th. We also believe that it is now time to consider a pivot in RBI’s monetary policy and list down 6 reasons for the same. The reasons touch upon the role of global factors, domestic macroeconomic conditions, evolving money market conditions, structural shift in economy’s financial structure, and changes in avian characteristics of MPC members.