RBI policy: Rajan takes a calculated gamble by not hiking rates

  • LiveMint
  • Updated: Dec 19, 2013 10:27 IST

By every yardstick, RBI’s decision to hold on to the current policy rate despite rising inflation is a close call. Instead of going for an all-out attack against inflation and bottling inflationary expectations by being proactive, Rajan has preferred to play a game of catch-up.

Not too many analysts are expecting a significant reduction in inflation numbers—both retail as well as wholesale—in December. If indeed that is the case, Rajan is merely delaying the inevitable.

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