Despite the recent spate of concerns about moderating growth, the Reserve Bank of India came out with guns blazing against inflation. The higher than expected 50 basis points hike caught the pundits and markets wrong footed. The bank also took the government to task for being lax on fiscal policy.
In its statement the bank said that one of the expected outcomes of the policy action was to “reinforce the point that in the absence of complementary policy responses on both demand and supply sides, stronger monetary policy actions are required.”
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