25bps rate hike: 2 things you should know

It was all about inflation. From the RBI press release:

  1. While retail inflation measured by the consumer price index (CPI) declined significantly on account of the anticipated disinflation in vegetable and fruit prices… It is critical to address these risks to the inflation outlook resolutely in order to stabilise and anchor inflation expectations, even while recognising the economy is weak and substantial fiscal tightening is likely in Q4
  2. Real GDP growth can be expected to firm up from a little below 5% in 2013-14 to a range of 5 to 6% in 2014-15






Next policy review: Tuesday, April 1, 2014.

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