India Inflation Will Be Contained Around 4%, Says Mizuho’s Varathan

The transcript discusses the shift in monetary policy from a neutral to an accommodative stance after cumulative rate hikes. It highlights the challenges of policy transmission in India, particularly due to constraints in the banking sector, including state and shadow banks. The discussion also covers the potential risks of inflation and economic instability, emphasizing the importance of effective policy transmission to ensure economic growth and stability.

What was the surprising change in monetary policy stance after the rate hikes?

• From accommodative to neutral

• From neutral to accommodative

• From loose to tight

• From tight to loose

What is one of the main reasons for the failure of policy transmission in the economy?

• High inflation rates

• Lack of government support

• Constraints faced by state banks and shadow banks

• Excessive foreign investment

What issue do public sector banks face that affects their lending capabilities?

• Excessive liquidity

• High non-performing loans (NPL)

• Low customer demand

• High interest rates

How might further rate cuts impact inflation in India?

• They will definitely reduce inflation

• They could make inflation more volatile

• They will stabilize inflation at 2%

• They will have no impact on inflation

What geopolitical factor could influence oil price volatility?

• Geopolitical tensions

• Technological advancements

• Climate change policies

• Trade agreements