The credit policy announced was on expected lines, and, hence, there was no surprise. The repo rate was kept unchanged, and the stance kept neutral. Is there something that can be taken from the statement presented by the RBI?

First, the RBI has revised the GDP growth forecast for the year from 6.6% to 6.7%. On the face of it, this does not mean much, as there is hardly any difference between the two numbers. However, this is symbolic of the fact that notwithstanding the developments that have taken place in the global space in terms of war, the Indian economy is not expected to be buffeted in any way. The war has cast a shadow on the economic prospects of all countries, given that the actions of the USA happen to be quite unpredictable, being idiosyncratic. A related thought here is that if growth is on expected lines, there is nothing much to be done on the monetary side to prevent a downslide. Therefore, an unchanged repo looks appropriate.

Second, the RBI has also lowered its inflation forecast for the year from 5.1% to 5%. Here, too, it is quite marginal to be materially different from the June projection. But here the symbolism is that inflation will be lower than expected earlier, especially considering the fact that the monsoon has not exactly been very good and the area under cultivation for several crops is lower than earlier.........

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