Opinion | The MPC faces the risk of losing the plot
The MPC's neglect of the factors affecting the rupee's health has come back to haunt it
This week’s monetary policy committee’s (MPC) meeting takes place in circumstances that are drastically different from those that dictated the tone and outcomes of its recent meetings. Headline consumer price index (CPI) inflation has eased significantly for two consecutive months, but the rupee’s palpitations and tight domestic liquidity complicate the picture. With Brent oil prices rising up to $85 per barrel, India’s growth strengthening, global liquidity tightening, and core inflation already uncomfortably high this early in the recovery phase, the MPC should hike the repo rate again.