China’s twin measures to boost growth—a rate cut and allowing banks to set competitive lending and deposit rates—was an unequivocal signal that bolstering growth is the prime imperative.
What makes the People’s Bank of China’s job easier—and the Reserve Bank of India’s (RBI’s) harder—is inflation. On the other hand, India’s April industrial production numbers look dire in comparison with those of its neighbour.
How will RBI resolve the inflation-growth dilemma on 18 June, when the next monetary policy announcement is due? While one RBI deputy governor seemed to signal a rate cut on Monday, another appeared to veer the other way on Friday.