Importance of policy transmission Monetary policy transmission refers to the translation of monetary policy actions into the financial system via banking and trading channels. By changing the short-term interest rate—like the repo rate in India or the federal funds rate in the US—a central bank signals other banks to change their lending and deposit rates. […]
Measures of inflation in India The RBI (Reserve Bank of India) considers the CPI (consumer price index) as its primary gauge of measuring inflation. Prior to the RBI adopting the CPI, in India (PIN) (FINGX), another measure of inflation, the WPI (wholesale price index), was its key gauge of inflation and is still considered for […]
The RBI looks at the CPI as its primary gauge for measuring inflation. The RBI has CPI growth targets to adhere to while deciding its monetary policy stance.
Industrial production remains a problem for India, with the RBI (Reserve Bank of India) noting that the index measuring industrial production decelerated in fiscal 2015–16.
Indian stocks had a great March. The rebound began after the Union Budget announcement on February 29. The fiscal discipline shown by the government raised hopes that the Reserve Bank of India may reduce interest rates.
The RBI’s assessment was that the CPI inflation would rise after September—based on the fact that the base effect, which has kept it down, would wear off.
