Time to start cutting interest rates

The November inflation data has quashed the faint hope of a reversal in RBI’s monetary policy stance in its forthcoming mid-quarter policy review. Two of the biggest concerns (growth and the rupee) need to be addressed very quickly, while the third (inflation) is becoming increasingly intertwined with the former.  Although the case for the economic situation warranting an easing of monetary policy stance still remains strong, it is easy to empathise with RBI’s caution in doing so.

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