Basu’s out of box thinking: Cut policy rates to reduce inflation

There was a strong view in the same meeting that the RBI should have meted out a “shock treatment” by effecting sharp hikes in rates to douse inflationary expectations at the very beginning of the current monetary tightening stance. Those advocating this said high inflation has persisted because the 'baby steps' of small increases in policy rates have been ineffective in anchoring inflationary expectations......

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