“Inflationary pressures at present are largely supply-driven, stemming from elevated fuel and input costs, along with a weaker rupee. As such, the MPC may choose to look through these supply-side pressures in its policy assessment. However, the committee is likely to remain watchful of the risk of spillovers to household inflation expectations, and the possibility of second-round effects leading to broader generalisation of price pressures,” Deshpande said.
