Thread by @MitaliLive

A thread on my piece on the RBI. Full story link here:
But the central ( pun unintended) question here is, what should the Reserve Bank be doing in this environment, and is it doing what it should/could ? 1/n
#inflation #RBI #UkraineRussianWar #CrudeOil
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Last RBI meeting saw inflation being termed as not a big worry and that action will be taken when necessary. Let’s examine what has happened with some of the elements that add to the inflation/ cost pressures of a household 2/n
#inflation #RBI #UkraineRussianWar #CrudeOil

Nomura says we've had high inflation for 2 years already. Retail fuel prices are on freeze since Nov'21 thanks to state elections. A recalibration means upping petrol/diesel prices by at least 10%, 30% plus price hike for LPG. 3/n
#inflation #RBI #UkraineRussianWar #CrudeOil

Hindustan Unilever has raised product prices twice this month by 1-9%. Dairy major Amul upped milk prices by ₹ 2 per litre. With metals also kissing new highs, home appliances, vehicles, a lot else gets expensive. Services too. 4/n
#inflation #RBI #UkraineRussianWar #CrudeOil

What are other Central Banks doing ? Fed is tightening hard. BOE back-to-back hikes, same for Brazil. Bank of Canada moves in March, ditto for ECB i.e. biggest round of tightening since 1990s, hoping economies see a soft landing 5/n
#inflation #RBI #UkraineRussianWar #CrudeOil

RBI says growth recovery is key. On Jan 31st, CEA guides to 8%-8.5% real growth. FM in her Budget speech indicates real GDP will be 6.6%. 9 days after, RBI says real GDP will grow by 7.8% 3 targets, 3outcomes. Which one shall we go with ? 6/n
#inflation #RBI #UkraineRussianWar

Is everything going wrong ? No, currency management and heavy flows in the debt market have been handled well. But has the RBI then been reduced to playing monitor in the debt & forex market and channeling the Centre’s borrowing programme ? 7/n
#inflation #RBI #UkraineRussianWar

Given the Ukraine war, what's the cost of being behind the curve? Roosevelt said ‘In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.’ n/n
#inflation #RBI #UkraineRussianWar