RBI Paper: How Rate Hikes Since May '22 Helped Slash Inflation By 1.60%
According to an RBI research study, monetary policy actions implemented since May 2022 have decreased inflation by 1.60%, hence boosting price stability and economic growth.
RBI Paper: How Rate Hikes Since May '22 Helped Slash Inflation By 1.60%
A recent study published by the Reserve Bank of India (RBI) indicates that the central bank's monetary policy measures, including interest rate increases since May 2022, have significantly aided in controlling inflation.
“The hikes in policy rates have stabilised inflation expectations and adjusted overall demand, leading to disinflationary outcomes,” stated the paper authored by Deputy Governor Michael Patra, Indranil Bhattacharyya, Joice John, and Avnish Kumar.
The study on the effects of monetary policy demonstrated that policy adjustments influence short-term interest rates more strongly than long-term rates, clarifying that the findings do not reflect the central bank's official stance.
RBI rate cuts history: It’s important to mention that previously, RBI officials have claimed that high interest rates did not affect growth.
In fact, there have been instances where the effects of monetary policy on inflation have been questioned, especially when inflation is influenced by supply-side factors.
