Economics
India's Policy U-Turn May Risk a Growth Blowback for Cash-Poor Economy
- RBI cites high underlying inflation, firmer commodities
- Central bank sees growth recovering as cash ban impact ebbs
India Policy U-Turn Risks Growth Blowback
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India’s central bank is making a habit of surprising markets. It may be in for a nasty surprise of its own if the economy hobbled by an unprecedented cash crunch fails to snap back.
The Reserve Bank of India has gone against consensus at every meeting since Governor Urjit Patel took over in September. Policy makers on Wednesday kept interest rates unchanged and raised the bar on future easing by abandoning an accommodative policy stance that’s been in place since June 2015. They cited stubbornly high underlying inflation and rising global commodity prices.