Under these circumstances, in the short-term money markets, the overnight call rate continues to move at very close to zero percent. Meanwhile, TB and FB rates, which declined temporarily after the Monetary Policy Meeting held on October 30, have inched up since mid-November as banks have held off buying TB and FB in response to a drop in bank stock prices.
The economy has faced a series of negative global supply shocks in the form of surging energy and commodity prices, compounded by supply bottlenecks. The Russian invasion of Ukraine and “zero Covid” policies in China are now prolonging and amplifying these shocks, which are all contributing to very high imported inflation.