RBI MPC minutes hawkish, retail inflation may hit 6% in Oct-Nov

Two financial reports present diverging views on India's inflation trajectory after the RBI Monetary Policy Committee minutes revealed a hawkish undertone. ICICI Bank's analysis, covered by Times Now, flags that the MPC minutes signal a stern posture despite a seemingly dovish policy statement, with CPI likely peaking at 5.9% in Q3 FY27 and building a case for rate hikes. The report warns that elevated oil prices could push a tightening cycle closer to December rather than early next year.

In contrast, an SBI Research report carried by The Hindu Business Line forecasts retail inflation briefly crossing 6% in October-November before easing to about 5% in Q4 FY27. It cites improving food supply conditions from a recovered monsoon and better irrigation, narrowing the rainfall deficit from 40% to 13%. The SBI report also criticises RBI communication, noting markets should weigh pragmatic actions like VRRR operations over forward guidance.

RBI Governor Sanjay Malhotra has said the central bank needs greater clarity on inflation before recalibrating rates. Both reports agree that global factors from US tariffs to oil markets remain key risks. Markets will watch August inflation data expected at 4.7% and the kharif harvest for confirmation of the easing trajectory.