Large transfers and bond buys by the Reserve Bank of India have supported fiscal maths and liquidity; sustaining this when inflation or capital flows shift may prove harder
The report concluded that although international policy consensus was shifting towards multiple-target, multiple-instrument frameworks, India should first focus on reducing the then high inflation
If FY23, crude oil prices were to average $120 a barrel, our current account deficit could rise to 3.8 per cent of GDP. Until the quality of our external balance improves, India needs forex buffers