Concerns over policy benchmark surface again with sticky consumer price index

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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: With the consumer price index (CPI) being over Reserve Bank of India’s upper tolerance level for consecutive five months lessening the scope for fresh rate actions, the long standing debate over the construct of CPI has surfaced again. Some experts argued for a more appropriate benchmark for the inflation targeting monetary policy maker.Former RBI deputy governor SS Mundra urged economists to deliberate over the issue of CPI

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