If only the RBI did the same.

"Several storms hitting together prompted the Monetary Policy Committee (MPC) to go for an off-cycle hike of 40 basis points in the repo rate on May 4, according to the minutes of the rate setting panel released on Wednesday," FE. "In an unscheduled press briefing..., the Reserve Bank of India (RBI) Governor Shaktikanta Das announced that" "The policy rate has been hiked by 40 bps (basis points) to 4,40% with immediate effect," ET. "As several storms hit together, our monetary policy response should be seen as an important response to steady the ship. The Indian as well as global evidence clearly shows that high inflation persistence hurts savings, investment, competitiveness and growth." Such prescience! Thing is, nothing has changed since 8 April when the MPC kept the repo rate unchanged at 4% and injudiciously "The MPC has voted unanimously to continue with an accommodative stance to continue supporting growth." Showing astonishing lack of awareness, "Governor Das announced that the inflation for the current fiscal is now projected at 5.7%, up from 4.5% forecast in the February meeting." This when the US Bureau of Labor Statistics reported, "The Consumer Price Index increased 8.5 percent for the year ended March 2022, following a rise of 7.9 percent from February 20221 to February 2022." Referring to a hint by US Fed Chair Jerome Powell in March, Goldman Sachs predicted interest rate hikes of 50 basis points in both May and June meetings of the FOMC, BI. This was one month before the US Congress confirmed a second term for Powell, CNBC. Clearly, Powell was acting in the interest of his country even if he lost his position. Two days back Powell emphasized "he will back interest rate increases until prices start falling back toward a healthy level", CNBC. What a contrast to our RBI which said "in its 'State of Economy' report that forex reserves of $596 billion, as on May 6 this year, were equivalent to about 10 months of projected imports for FY23. The central bank also released data showing it sold $20 billion of its reserves in March 2022," TOI. This was in an irresponsible, ultimately futile, effort to put a lid on rising prices of imports, especially oil, by increasing the exchange rate of the rupee. Why? "Raising interest rates makes borrowing dearer for the country's biggest debtor, the government. Tolerating inflation helps the government by lowering the real value of its interest outgo (interest payments adjusted for inflation)," wrote Pramit Bhattacharya. So, why not carry on with high inflation regardless of how many poor people suffer starvation? Because, "The bank currently holds nearly $190 billion worth of Indian government securities on its balance sheet," wrote Karan Mehrishi. This may be because the RBI has been buying government bonds, confusingly called G-SAP, TIE, to increase their value and lower yields, thereby lowering borrowing costs for the government. "Since the beginning of the year, domestic assets have seen about $2-4 billion in revaluation losses amid rising bond yields." Powell put country before self. If only the RBI did the same.