Will easing farm commodity prices provide room to RBI to pause rate hikes?

While the govt has introduced windfall tax and export curbs to arrest runaway prices, a lot depends on how the monsoon pans out this season

After attaining record highs a few months back, prices of most food items, including edible oils, wheat, rice, cotton and even critical inputs like fertilisers have started coming down both domestically and internationally due to strong inflation control measures and some slowdown in demand.

But whether or not the indications will be good enough to prompt the Reserve Bank of India (RBI) to pause or recalibrate its interest rate hiking cycle is something only time will tell.

Rate hikes

The Monetary Policy Committee (MPC) raised the repo rate by 40 bps in an off-cycle move in May in order to