Not only have we shifted to a radically new committee-led approach, the economy has now been subject to a monetary shock through withdrawal of 86% of its currency in circulation. There are no ready lessons available to the monetary policy committee (MPC) on how to respond to a monetary shock of this scale. When MPC meets on 6 December, deliberations would centre around the currency withdrawal. With no precedents, economists are split on whether MPC should announce a rate cut or wait till the entire currency withdrawal plays out by 31 December. The impact of the currency withdrawal on inflation is complex.

Source: Mint November 20, 2016 21:50 UTC