................The RBI’s guidance states that a faster-than-currently-anticipated pace of disinflation, adjusted for base effects, will provide the headroom for an easing of the policy stance in future. Hard to say at this point as to what role a stronger currency might play in stabilizing prices ahead. A related question in this regard: What of the growth-inflation tradeoffs vis-à-vis exchange rate movements? How much growth could be impacted via reduced exports? That’s why the balance of outcomes on inflation and growth is worth watching out for.
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