9 March 2023 - Dhingra warns about further hikes

Monetary Policy Committee member, Swati Dhingra, nailed her colours firmly to the dovish mast, yesterday as she called for an immediate end to rate increases. She believes that any further hikes present a material risk to the economy in the medium term. In her opinion, interest rate increases take about a year to see their full effect on inflation, and with rates having risen by 390 basis points over the last fifteen months, there should be a pause to fully evaluate their effect. She voted against hikes at both the December and February meetings. Which leads to a conclusion that she feels that the rise in interest rates should have been halted at 3%, instead further increases have seen the base rate rise by another 100 points. She doesn't feel that there is sufficient evidence to hand that inflation is becoming embedded in either wages or margins. Dhingra believes that consumption remains weak even without the full effect of a significant tightening of monetary policy being seen. Beyond Currency Market Commentary: Aims to provide deep insights into the political and economic events worldwide that can cause currencies to change and how this can affect your FX Exposure.