New Delhi, June 7 -- Over the last few months, the geopolitical situation and our economic fundamentals have changed. In the aftermath of the West Asia war, crude prices have shot up. India's exchange rate is wobbly, driven by high oil prices and significant sell-off by foreign portfolio investors (FPIs) in equity. All this will affect inflation going forward.

Adding to the concerns, the India Meteorological Department (IMD) has projected monsoon at 90% of the long period average (LPA). If agriculture gets impacted, inflation goes northward. Food is the biggest component of our consumer inflation measurement basket.

Against this backdrop, the monetary policy committee (MPC) of the Reserve Bank of India on Friday decided to hold the repo...