Surprisingly, a softer note on inflation comes from RBI governor Urjit Patel apart from the dovish Ravindra Dholakia. While some members believe that growth impulses are not entrenched, others such as Dholakia feel that growth still needs a helping hand from monetary policy. Acharya rightly points out that monetary policy needs to separate signal from noise with regard to data. He explains that the fall in headline inflation was driven by food and that monetary policy should look through it. The bond markets have been wise enough to separate the signal from the noise surrounding monetary policy.

Source: Mint April 20, 2018 03:00 UTC