India's inflation focus may not mean higher rates for longer

The Monetary Policy Committee (MPC) has reaffirmed its commitment to a 4% retail inflation target, as inflation has returned to the 2%-6% comfort range. However, this doesn't necessarily imply that interest rates will remain higher for longer, according to MPC external members Jayanth Varma and Ashima Goyal. Over the past year, India's inflation exceeded the MPC's 6% upper limit in five out of 12 months but remained within the acceptable range during the remaining seven months.