The Reserve Bank of India will need further proof that inflation has been tamed before it can start reducing policy rates, according to Moody's Analytics. The growth side of the economy has cooled, but inflation remains elevated, leaving the RBI in a tight spot, Moody's Analytics said in a research note issued after the announcement of India's headline inflation for March. The research firm said that it had always maintained that RBI should have begun lowering rates to shore up the economy's demand side. But it is not so simple for the central bank, which raised rates aggressively in 2010 and 2011 to counter inflation, the note said...........
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