Reserve Bank of India has shifted to a slower gear. Officials are hamstrung by inflation that persistently runs above the central bank's 4% target (with a buffer of 2% on either side).
The cocktail of frustration and fatalism running through minutes of the central bank’s most recent meeting is understandable: India is one of the few emerging markets where consumer price increases are above pre-pandemic levels, according to Oxford Economics.
That’s largely thanks to a jump in vegetable prices.The logjam needs to be broken, nevertheless. Lower borrowing costs won’t speed the arrival of a vaccine or suppress cases, but they can alleviate conditions and help put a floor under confidence.