In it's effort to rein in inflation, RBI raised rates for the eleventh time in the last fifteen months. I apologize for the poor quality of the graphs. If you squint a little you will see the trend of rate hikes.
India benchmark Interest rates:
Here is how inflation has been trending. The rate of inflation has been at hovering above 8 to 9 percent for the last 18 months.
Despite recent slowdown in sales of goods like cars, the underlying demand picture in India remains quite robust. Unfortunately, structural problems such as poor infrastructure, antiquated labour laws,lack of investment in agriculture remain stumbling blocks for the supply side in bridging the gap.
Crude oil which plays a critical role in India's inflation picture has been stubbornly high. Food and commodity prices are largely outside the realm of influence of RBI's monetary policy If the global economic picture remains stable or gets better, monetary policy alone in India would not help tame the inflation. A spirited policy response from the government is urgently needed.
India benchmark Interest rates:
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| Source:tradingeconomics.com |
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| Source:tradingeconomics.com |
Despite recent slowdown in sales of goods like cars, the underlying demand picture in India remains quite robust. Unfortunately, structural problems such as poor infrastructure, antiquated labour laws,lack of investment in agriculture remain stumbling blocks for the supply side in bridging the gap.
Crude oil which plays a critical role in India's inflation picture has been stubbornly high. Food and commodity prices are largely outside the realm of influence of RBI's monetary policy If the global economic picture remains stable or gets better, monetary policy alone in India would not help tame the inflation. A spirited policy response from the government is urgently needed.
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