The Reserve Bank of India is not “late” in raising interest rates to tackle rising inflation, Monetary Policy Committee (MPC) member Ashima Goyal said on Sunday. She said it is never wise to overreact to shocks when the economic recovery is fragile from the coronavirus pandemic.
While acknowledging that India is “particularly vulnerable” to the combination of food and crude oil inflation triggered by the Russian-Ukrainian war, Goyal, also a prominent economist, said rate hikes should be aligned with economic recovery.
“RBI started to rebalance liquidity last year, while the US Federal Reserve has yet to start shrinking its balance sheet, with inflation well above its target,” she said.
First post: STI