Life is never easy for central bankers. Just as domestic inflation seemed to come under control and liquidity levels normalise, the Reserve Bank of India is suddenly faced with the proverbial mother of all shocks in the form of the steep reciprocal tariffs imposed by the US on all trading partners.One hopes that the RBI isn’t lulled into complacency by the back-of-the-envelope calculations that are currently doing the rounds. They, somewhat misguidedly, emphasise India’s resilience to the tariff shock given its export exposure to the US and the fact that sectors like pharmaceuticals are exempt.
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