• We took a a long time to get rates up
  • Couple that with the transmission lags, we're still looking at a pretty restrictive period of monetary policy even after you start the moderation
  • Fairly convinced that falling prices are not solely driven by energy alone
  • At this point, about 97% of annual CPI inflation items have turned down
  • Fall in retail sales is pretty convincing and unexpected
  • Not fully convinced of sharp excess demand in the economy from the consumption side
  • Does not see a reason to trade off weak consumption when inflation is on a sustainable path at this point
  • If you do the right policy and if you even deviate for the right reasons, people will understand

Dhingra was the only one to vote for a 25 bps rate cut at the latest policy meeting here. She's saying that she is convinced of a continued decline in inflation and considering the state of consumption activity, a rate cut would be appropriate now. She argues that even with cutting rates early, monetary policy will still be restrictive.