The Reserve Bank of India (RBI) has hiked the repo rate by 35 basis points (bps) from 5.9% to 6.25%. A slower pace of rate hike from last time reflects some incremental comfort that the RBI is drawing on inflation. But it doesn’t signal absolute comfort or any reversal of the rate hike cycle. The RBI has clearly stated two distinct objectives on headline inflation, first to bring it below the 6% threshold, and then further towards 4%. It makes logical sense too.