Not by rate hikes alone

Inflation continues to persist and pose a problem even though food inflation has declined. For nearly two years, the Reserve Bank’s stance on inflation was that food inflation is caused by supply side constraints, and the RBI could not, and should not, do anything about it. The result of that policy has been high inflationary expectations and persistent inflation. Today, when world crude oil prices are rising, what should the RBI’s policy be?

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