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A healthy debate: The case for and against interest rate hike

Having raised policy rates to about 6 per cent, does India's Monetary Policy Committee need to do more? And, if so, is more front-loading warranted?

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7 min read Last Updated : Oct 31 2022 | 10:41 PM IST

Confronted with the trifecta of a surging US dollar, elevated global commodity prices and the most aggressive and synchronised global monetary tightening cycle in 40 years, India’s Monetary Policy Committee (MPC) has put its head down since April and done what needed to be done: Re-prioritising inflation and gradually calibrating India’s monetary settings to a post-pandemic world.

But having taken effective policy rates from 3.35 per cent to about 6 per cent, the MPC is now witnessing a healthy debate: Does more need to be done? Has enough been front-loaded? One school of thought within the Committee is to now

Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

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