Friday, August 17, 2012

Drought year

.......In terms of monetary policy implication, the Reserve Bank of India (RBI) has said that focusing only on core inflation—inflation minus food and fuel— may not be appropriate in the Indian context. Put differently, higher food prices, resulting in higher general price level, will not allow RBI to cut rates anytime soon. As a result, monetary policy may not come to the rescue, as expected, at a time when growth is slowing down.

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