Rate hikes since May '22 helped reduce inflation by 1.60%: RBI paper

A paper by senior Reserve Bank of India (RBI) staff revealed that the central bank's cumulative rate hikes of 2.5 percentage points since May 2022 have negatively impacted headline inflation by 1.60%. The study, which does not reflect the official views of the RBI, indicated that these rate increases have helped anchor inflation expectations and modulate aggregate demand, resulting in disinflationary effects.