Context: In the light of Consumer Price Index (CPI) inflation touching 6.9%, there is a need for a more explicit analysis of monetary policy on inflation:
Issues with the Monetary Policy:
Steps taken by the Reserve Bank of India to raise liquidity
Significance of Monetary Policy in managing Inflation:
Conclusion: Monetary Policy Statements should explicitly analyse possible impacts of change in the policy rate and money supply on the general price level in the Economy.