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RBI not behind the curve in hiking rates, says Ashima Goyal of rate-setting panel

Her comments come after the the central bank’s rate-setting panel recently surprised the markets with a 40 basis point hike in repo rate in an off-cycle policy meeting this month.

May 15, 2022 / 11:40 AM IST

The Reserve Bank of India is not behind the curve in hiking interest rate to tackle rising inflation, Monetary Policy Committee (MPC) member Ashima Goyal told PTI on May 15.

Goyal asserted that it is never wise to overreact to shocks when the economic recovery is shaky after the pandemic.

While acknowledging that India is "especially vulnerable” to the combination of food and crude oil inflation unleashed by the Russia-Ukraine war, economist Goyal said rate hikes should be aligned with the economic recovery.

Her comments come after the MPC, the central bank’s rate-setting panel, recently surprised the markets with a 40 basis point hike in repo rate in an off-cycle policy meeting.

It was also the first rate hike after August 2018 amid spiralling inflation.

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"RBI started rebalancing liquidity last year, while the US Federal Reserve is yet to start contracting its balance sheet, with inflation far in excess of its target," she told.



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Moneycontrol News
first published: May 15, 2022 11:40 am
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