With retail inflation likely to see a spike in the wake of the sharp rise in crude oil prices, the Reserve Bank of India faces the risk of falling behind the curve in controlling inflation. The bank’s accommodative policy stance — surplus liquidity in the financial system and low interest rates — so far has worked well.
Consumer price inflation in India is likely to hit seven per cent mark as crude prices touched $116 per barrel recently, the Reserve Bank of India (RBI) has said. Consumer price inflation crossed the RBI’s upper tolerance level of six per cent to 6.01 per cent in January.
“I have argued in successive dissents for many months now that a change in the accommodative stance is long overdue,” said Jayanth Varma, who has been opposing the RBI’s accommodative policy stance.
Complete News Source : The Indian Express
