Tightening to continue

RBI has to cover more ground

The Monetary Policy Committee (MPC) is expected to further increase the policy repo rate this week. While the consumer price index-based inflation rate has moderated, it is still at a significantly high level. The rate in June, for instance, was at 7.01 per cent as against 7.79 per cent in April. Global commodity prices have come down over the past few months, but are still elevated and there are other risks that the MPC would need to consider. The global economy is rapidly losing momentum and the recovery from the pandemic-induced disruption is weakening. The International Monetary Fund, for instance,