 "RBI")
The Monetary Policy Committee (MPC) sprang a surprise by keeping the repo rate unchanged even as it changed its stance to “calibrated tightening”. In justification of the rate decision the committee lowered its inflation projection for rest of the year as well as for Q1FY20. The growth projections were left unchanged.
The decision on Friday underlines a strict adherence to its inflation mandate to the exclusion of all other considerations such as exchange rate and financial stability. While this is in line with its legislative mandate, it also flies in face of evolution of thinking on central banks.
The decision on Friday underlines a strict adherence to its inflation mandate to the exclusion of all other considerations such as exchange rate and financial stability. While this is in line with its legislative mandate, it also flies in face of evolution of thinking on central banks.
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