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The art and science of managing inflation

The conduct of monetary policy is not based on simplistic binaries, particularly during times of extraordinary uncertainty

BS Opinion | Inflation | Reverse Repo Rate

Saugata Bhattacharya 

Saugata Bhattacharya

The conduct of monetary policy in India has been critiqued by economists in recent weeks. The following are some of the perceived lacunae. One, that there has been an unwarranted delay in shifting priority from supporting growth to controlling . The latter is anyway the primary objective of the (MPC) given its mandate as a (flexible) targeting institution. Two, that policy has been pursuing multiple objectives, in addition to balancing the inflation-growth trade-off, resulting in a loss of focus on the primary objective of price stability, preventing a timely response to persistently high . As a corollary, a disconnect, even dissonance, has emerged between statements and actions, hindering clear communication and forward guidance to markets.



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First Published: Tue, June 28 2022. 00:30 IST