HSBC Chief India Economist Pranjul Bhandari Discusses RBI Decision

The transcript discusses the Reserve Bank of India's (RBI) current policy stance, focusing on growth concerns and the potential impact of a third COVID-19 wave. It highlights inflation concerns, noting that inflation has been above the target for 21 months. The RBI is expected to start a gradual normalization path in late 2021, focusing on liquidity and inflation. The risks of stagflation and the challenges of inflation targeting are also discussed. The impact of interest rates on India's informal economy and the limited efficacy of monetary policy in such a context are examined.

What are the concerns regarding inflation mentioned in the text?

How has the RBI's stance on liquidity changed over the past year?

What factors contribute to the challenges of interest rate adjustments in India?

What is the expected timeline for the RBI to start normalizing its policy stance?

Discuss the impact of the informal sector on the effectiveness of monetary policy in India.