RBI policymakers spar over high inflation forecasts, steep yield curve

For months now, inflation has exceeded the central bank's tolerance band and held it back from cutting rates

A debate is raging among India’s monetary panel members on the credibility of the central bank’s inflation forecasts, raising questions over its price-growth targeting regime.

The argument between Michael Patra, the deputy governor for monetary policy, and J.R. Varma, a new member of the rate-setting panel, centers around whether the nation’s steep yield curve reveals a lack of market confidence in the Reserve Bank of India’s inflation estimates or is a reflection of excessive focus on old data.

For months now, inflation has exceeded the RBI’s tolerance band and held it back from cutting rates. Instead, it introduced liquidity measures