The RBI will continue to focus on inflation rather than the IP data as it prepares itself for the forthcoming policy meeting in June. It would rather wait for a few more data points before making the next move. For the RBI, it would also make sense to move the policy announcement date from the first half of the month to the second half. Given that the CPI data traditionally comes out on the 12th of the month and WPI on the 14th, the RBI misses out on crucial data points and has to make a call based on data that is nearly a month old. For the next meeting, the RBI is likely to remain on hold, though there is a risk of a rate cut if the RBI is convinced that the tailwinds (as mentioned above) will not materialise.
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