Setting the stage for RBI

Setting the stage for RBI

The central bank has raised its key policy rate 12 times since March 2010, from 3.25% to 8.25%, but still hasn’t been able to tame inflation which continues to rule above 9%. Meanwhile, the tight money policy has taken its toll on growth. In previous policy reviews, the Reserve Bank of India made it clear that inflation is enemy No.1 and it was ready to sacrifice growth in the world’s 10th major economy to fight persistently high inflation. Time is not ripe to change the stance of the policy, but will the central bank press the pause button and wait and watch before the next step? Or will it go for yet another rate hike? If indeed that happens, are we close to the end of the rate hiking cycle?

Also Read | Setting the stage for RBI (PDF)

Compiled by Joel Rebello

Graphics by Ahmed Raza Khan/Mint