Monetary policy must respond nimbly to second inflation round: IMF official

In a Q&A, the lead author of IMF's Asia and Pacific Outlook, dwells on the impact the Fed's move on the benchmark rate could impact India

Shanaka Jayanath (Jay) Peiris, the lead author of the International Monetary Fund’s (IMF) Asia and Pacific Outlook which came out last month, was in Delhi recently. He told Indivjal Dhasmana that while the Federal Reserve’s decision to raise key benchmark rate by 50 basis points was largely anticipated, any large movements in global equity markets from a sharper-than-expected tightening in the advanced economies would have implications for equity outflows from India. He talks on the monetary policy committee’s rate hike, India Inc’s debt, and exports prospects, among other things. Edited excerpts:

Q. The IMF’s Asia and Pacific Outlook says a