Raghuram Rajan takes a calculated gamble by not hiking rates

........By every yardstick, RBI’s decision to hold on to the current policy rate despite rising inflation is a close call. Instead of going for an all-out attack against inflation and bottling inflationary expectations by being proactive, Rajan has preferred to play a game of catch-up. Not too many analysts are expecting a significant reduction in inflation numbers—both retail as well as wholesale—in December. If indeed that is the case, Rajan is merely delaying the inevitable. An action-less policy at this point is not in sync with his stated stance against inflation. Moreover, the time was ideal as there would not have been an iota of political opposition to a rate hike at this juncture............

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