RBI strikes, but why now?

The Reserve Bank of India’s (RBI) shock and awe strike has stunned everybody, leaving the markets reeling with its impact. Coming, as it does, against the backdrop of its new “openness-no surprise” approach to policymaking, the hefty hike of 50 basis points (bps)—on the back of a cumulative 75 bps hike in the past two months—throws up several puzzles.

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