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A tough call for MPC in its last meeting

Can the MPC afford to see through this spike in inflation because demand is poor and inflation will eventually trend down?

August 04, 2020 / 08:22 PM IST
A tough call for MPC in its last meeting

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The Reserve Bank of India’s monetary policy committee faces a tough choice. At the very end of its tenure (the current committee with its existing members finishes its 4-year term); the committee faces the prospect of slipping up on its flexible inflation targeting mandate. That’s because India’s consumer price inflation averaged 6.67 percent and 6.52 percent in the March and June quarters respectively. Under the terms of the monetary policy framework signed by the government and the central bank, RBI...

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