Monetary Policy: Reserve Bank picked a heck of a time to slow things down

If Reserve Bank's rate cut pause has shocked you, blame it on inflation

The Reserve Bank of India is ending the year as it began: with a shock.

Policymakers held their benchmark interest rate at 5.15 per cent Thursday. Not a single economist among the 43 surveyed by Bloomberg News predicted this outcome. 

Central banks generally hate giving surprises. It makes people wonder what officials know that they don't, and tends to sap confidence. So what explains this head-scratcher?

Blame inflation. The RBI cited concerns about rising prices, given that headline inflation breached its 4 per cent medium-term target in October. Food prices have skyrocketed as a result of heavy rainfall, with the