India Says Inflation, Trade Gap Constrain Policy Scope: Economy

The Reserve Bank of India said the space for monetary policy to support economic growth remains constrained by elevated consumer-price inflation and a record current-account deficit.

“Monetary policy would need to be calibrated recognizing the very limited policy space available to ease further,” the Reserve Bank said yesterday in an economic review before today’s rate decision in Mumbai. It cited “significant” risks including a “high” current-account gap and “inflation above the threshold over which it becomes inimical to growth sustainability.”