If inflation does not come under control there will be more such actions: KR Bharat

In a chat with ET Now, KR Bharat, MD, Advent Advisors, gave his reaction on credit policy details. Excerpts:

I think the point about the interest rate corridor becoming narrower that has indeed happened with the reverse repo rate having gone up by 0.5% and also of course we are going to have midquarter policy review. So the policy review cycle is going to become shorter. But what is your first reaction to the policy details?

It's exactly what I said when you asked me at the beginning of the show what I thought was going to happen. I said the repo 25 basis points, but with an indication from the RBI that they would be reviewing this more frequently than before and I think this also answers the question on headroom. I think the midquarter review suggests that if inflation does not come under control, the way the RBI wants it to do there will be more frequent action and the headroom is not an issue. It’s inflation control that is the issue at this point of time, particularly since the economy also seems to be growing at a rage which is sort of commence rate with what the regulators want.