RBI flags widening inflation risks, puts rate cuts on ice

RBI shifted its monetary policy stance from neutral to calibrated tightening as inflation broadened, with 37% of consumer-basket commodities recording inflation above 4% in August versus 20% in March. Core inflation rose to 4.2% from 3.9% in July, while headline inflation could reach the 6% upper tolerance limit, putting near-term rate cuts off the table and leaving a rate hike or pause as the next possible action.