The RBI’s next big question: how to normalise monetary policy?

For much of last year, India’s central bank had been dealing with the problem of aplenty. This was because Asia’s third-largest economy was the largest recipient of foreign portfolio money, or ‘hot money’, emanating from developed nations with accommodative monetary policies such as the US, European Union and Japan. India’s democracy, its rule of law, its macroeconomic stability as well as its investment-grade sovereign credit rating – made it stand out amongst peers. As a result, the Reserve

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