But monetary policy does not offer a template for when to tighten, how to tighten and how much to tighten. This remains a judgement call. We face this dilemma all the time but did so most acutely during the Annual Policy Review in April 2010.
Year-on-year WPI non-food manufactured products inflation had moved up further from 4.5 per cent in February 2010 to 5.4 per cent in March 2010 evidencing clearly that demand side pressures on inflation were strengthening. 38. To understand the demand side pressures in perspective, we need to go back two years to August 2008, a month before the global crisis struck.