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Concerns over policy benchmark surface again with sticky consumer price index

Concerns over policy benchmark surface again with sticky consumer price index
Concerns over policy benchmark surface again with sticky consumer price index

Synopsis

Although monetary policy cannot rein in the food prices spiral, lowering of rates does impact savers, especially seniors who largely rely on interest income for a living. Higher food is making living costlier for consumers across the spectrum and therefore may not easily be ducked as input for policy making.

Kolkata: The debate over the composition of the consumer price index (CPI) has surfaced again, with retail inflation that has been staying above the Reserve Bank of India’s tolerance level for five consecutive months reducing the scope for fresh rateactions.Some experts argue for having a more appropriate benchmark for an inflation-targeting monetary policy or using a composite anchor instead of relying on a single index.Former RBI deputy
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The Economic Times