Former governor Urjit Patel struck a similar tone when he said that though the inflation trajectory has been revised downwards, several uncertainties persist.

However, Ravindra H. Dholakia held a different view. Calling for a change in stance back to neutral, he observed that though the MPC resolution said that inflationary expectations based on the latest RBI survey is constant compared to the previous one, most of the 18 cities surveyed showed a decline in the household inflationary expectation one year ahead.

The monetary policy committee (MPC) of the RBI sounded cautious on inflation and preferred to wait for more data to see for how long price pressure and growth momentum would remain soft, according to minutes of its December 5 meeting published on Wednesday. Most of the MPC members felt that upside risks to inflation remain and the price scenario, particularly for food and crude oil, is hazy.

According to the minutes of the meeting, RBI deputy governor Viral Acharya pointed out that given the relatively short period of time over which inflation has softened, it is important to remain data dependent and clearly understand the drivers of recent data on inflation.

The Telegraph