Several Moves in the market fixing the base rate and effecting the Repo and Reverse Repo rate come too late in our view as the RBI seems to be under Pressure from South Block and is not acting in the interest of the Nation for which it has been created. Inflationary pressure has been in Double Digits and we simply don’t understand why RBI is refusing to suck the excess liquidity driving prices like crazy.
The RBI under criticism from all corners took a baby step to increase Repo Rate and Reverse Repo rate by 25 bps each after businesses closed for the day. With WPI in Double Digits and the Government turning a blind eye, it is the common man who is suffering the most from price rise and looks like RBI is least bothered to tackle Inflation.
The RBI acknowledges that,
Food price inflation and consumer price inflation remain at elevated levels. There has been some moderation in food price inflation, but the price index of food articles continues to increase.
Then where is the ACTION ?