RBI misled by inflationary expectations

.....As inflationary expectations are crucial in monetary policy formulation, it would serve the economy better if the RBI were to expand the scope of its expectation surveys to correctly ascertain the same. Till such time, it would be better if the central bank adopted the indirect method to ascertain inflationary expectations. In the upcoming policy review on July 31, the policy tilt should be to revive growth unless there is clear indication that easing would aggravate inflation.

Read - HBL