The reality of forward guidance.

"Central banks could afford to provide forward guidance and use it to shape expectations over the past decade because economies were characterized by low inflation and interest rates," wrote Rajrishi Singhal. But Reserve Bank of India (RBI) Governor Shaktikanta Das is unhappy as, "Federal Reserve Chair Jerome Powell...emphasized the importance of getting inflation down now before the public gets too used to higher prices and comes to expect them as a norm." CNBC. Das said, "Such forward guidance may even have destabilising effects on financial markets," because the "RBI has frequently missed the mark with its GDP growth forecasts, which presumably then feed its inflation forecasts and shape its rate policy." Unfortunately for Das, "Federal Reserve officials look on track for another jumbo increase in interest rates this month, as they hasten to crimp demand and assure Americans they will bring inflation down to 2%." ET. Forward guidance by the European Central Bank (ECB) also promises higher rates. "The ECB lifted all its key rates by three-quarters of a percentage point and warned it was likely to raise rates again later this year." BBC. In its eagerness to keep borrowing costs low to help the government the RBI kept interest rate unchanged for a full 24 months at 4% since May 2020. NDTV. Until it suddenly increased its policy rate by 40 basis points in an emergency meeting of the Monetary Policy Committee in May 2022. ET. After that the RBI raised rates twice by 50 basis points each for a total of 140 basis points, taking its policy rate to 5.4%. ET. In contrast, "The Fed has already hiked interest rates by 225 basis points since March this year." BS. Instead of raising rates the RBI has been trying to control imported inflation by strengthening the rupee by selling dollars. The RBI sold $13 billion in August to keep the rupee from falling below 80 to the dollar. ET. As a result, our foreign exchange reserves slumped to $553.105 billion in the week ended 2 September. NDTV. Despite that "India's retail inflation based on consumer price index (CPI) snapped a 3-month downward trend in August and surged to 7%. TOI. It's being blamed on rise in food prices. Is it? "People are spending more than they bring home in income, forcing families to dig into savings of borrow money to make up the difference." India Today. Personal debt climbed to Rs 35.2 trillion at the end of June 2022, the RBI said. "Credit growth of commercial banks is at a nine-year high of 15.5 percent year-on-year for the week ended August 26." BS. Clearly people are not borrowing to buy food. "Emerging Asian central banks have seen a sharp depletion in their foreign-exchange reserves." ET. "Reserves cover about nine months of import for India, six for Indonesia, around eight for Philippines and seven for South Korea, Standard Chartered said." Das is complaining about forward guidance. What will he do when they become facts? Sell all the dollars?