InvestorQ : Will the RBI also increase interest rates now?
Archita Jajjoo made post

Will the RBI also increase interest rates now?

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Niti Shenoi answered.
5 months ago
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Unfortunately, RBI may not have much of a choice. CPI inflation would have been higher than 4.91% but for the high base effect. WPI inflation at 14.23% in November means that structural inflation in India is going to stay. Best way is to hike rates. Liquidity is already being addressed through VRRRs. If RBI does not intensify efforts now, India could risk big capital outflows in next few months.

Moral of the story is that it is end of easy money. The focus shifts to inflation. It comes with risks, but RBI may not have much of a choice.

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