Prøve GULL - Gratis
All quiet on the interest rate front
Hindustan Times
|August 22, 2023
A spike in the prices of staples has created a dilemma: Should RBI use blunt instruments such as interest rates, or take comfort from softening core inflation? For now, it should be the latter
The economy has battled volatile external conditions in the past few years, but the management of both growth and domestic inflation has been broadly on the ball, helping anchor India’s economic backdrop with enhanced macro stability. However, not everything can be controlled, as can be seen in the current retail price spike of tomatoes, a domestic staple. From a national average of ₹32/kg in June, prices rose to ₹140/kg in early August — ranging from ₹40/kg to ₹250/kg during that period. While the spike in prices has played out in the past six to seven weeks, they have now started to correct, albeit slowly, with new crops arriving in mandis and supermarkets.
Still, looking beyond tomatoes, the prices of cereals (especially rice), pulses, vegetables such as onions, spices, and electricity are also rising. Should this trend change the course of policymaking, especially monetary policy, which is mandated to target inflation? The Reserve Bank of India (RBI) has kept interest rates on hold since February, but recent elevated Consumer Price Index (CPI) inflation prints are now driving markets to price in a (remote) possibility of another rate hike. This, despite RBI signalling that it is somewhat willing to look beyond a transitory price shock, in its latest August meeting. Still, for any policymaker, including RBI, the dilemma around the current situation is this: Does it choose to react to a supply-led price shock with blunt instruments, such as interest rates, or take comfort from moderation in underlying core inflation? For now, we believe it should be the latter.
Denne historien er fra August 22, 2023-utgaven av Hindustan Times.
Abonner på Magzter GOLD for å få tilgang til tusenvis av kuraterte premiumhistorier og over 9000 magasiner og aviser.
Allerede abonnent? Logg på
FLERE HISTORIER FRA Hindustan Times
Hindustan Times Delhi
EVERYDAY COMFORT. REIMAGINED: BATA'S BALLERINA FLATS FOR LIFE IN MOTION
Between packed workdays, social plans, and everything in between, today's women need footwear that can keep up.
2 mins
February 13, 2026
Hindustan Times Delhi
‘Well-planned farce’: Hasina slams polls
Bangladesh’s deposed prime minister Sheikh Hasina on Thursday called the general elections being held by the interim government “a well-planned farce” and demanded holding of “free, fair and inclusive elections under a neutral caretaker government”.
1 min
February 13, 2026
Hindustan Times Delhi
Delhi plans legal authority to oversee its 'Unified Data Hub'
THE BODY WILL CURB DUPLICATION OF DATA, IDENTIFY BENEFICIARIES INELIGIBLE FOR SCHEMES
1 mins
February 13, 2026
Hindustan Times Delhi
Russia blocks WhatsApp
{ LAW VIOLATION } 100 MILLION USERS
1 min
February 13, 2026
Hindustan Times Delhi
SC puts Hry's zoo safari on hold till Aravallis are clearly defined
AMID CONFUSION OVER DEFINITION OF ARAVALLIS IN A MINING CASE, 5 IFS OFFICERS FILED A PLEA AGAINST THE ZOO SAFARI PLAN
3 mins
February 13, 2026
Hindustan Times Delhi
AI171 PLANE CRASH: FINAL COMPENSATION PROCESS BEGINS
Air India has initiated the process for providing final compensation to the families of those who died in the Air India’s AI 171 plane crash, wherein those willing to accept the amounts have to ensure that they will not make any future claims against the airline, original equipment manufacturers and government agencies in relation to the fatal accident.
1 min
February 13, 2026
Hindustan Times Delhi
Woman, daughter killed after car hits stationary truck in Ghazipur
A 55-year-old woman and her 38-year-old daughter, travelling with three other family members in a car, died when their car collided with a stationary truck near the MCD toll plaza on National Highway 9 (NH9) in Ghazipur on Thursday morning, police said.
2 mins
February 13, 2026
Hindustan Times Delhi
History lessons from Islamabad
Pakistani defence minister Khawaja Asif is right about his country’s record on terrorism. But will his government correct its course?
2 mins
February 13, 2026
Hindustan Times Delhi
John Mayer's India debut comes with a shoutout to Mumbai's men
Seven-time Grammy
1 min
February 13, 2026
Hindustan Times Delhi
Cabinet nod to RCB to play at Chinnaswamy
The Karnataka government on Thursday authorised the return of Indian Premier League (IPL) matches to Bengaluru’s M Chinnaswamy Stadium for the 2026 season, reversing a suspension imposed after the stampede last year.
1 min
February 13, 2026
Translate
Change font size
