Why India’s monetary policy is still effective, in 5 charts
SummaryThe RBI started tightening policy in May 2022, and inflation came within range in November. In contrast, in the rich world, especially in the US and UK, ordinary people are still bearing the brunt of high prices while also facing higher interest rates
New Delhi: India’s monetary policy committee (MPC) is meeting this week in an unusually tough environment. Keeping aside the usual inflation-growth tightrope, some policymakers are questioning the very effectiveness of monetary policy, whose basic tenets have been undermined by decades of globalization. Synchronized interest rate hikes by central banks have failed to tame inflation; rather, they have brought some countries to the brink of recession. But India’s story is different. Its monetary policy still clicks.