The Reserve Bank of India’s decision to raise its benchmark policy rate yet again, albeit by a smaller quarter percentage point, reflects a welcome resolve in staying committed to ensuring durable price stability. Given that the Monetary Policy Committee’s primary mandate is to steer retail inflation towards a 4% target, and that core price gains have stayed stuck above or almost at 6% for 20 months, the rate setting panel voted by a 4-2 majority to continue tightening policy. Governor Shaktikanta Das emphasised the significance of the MPC’s unwavering focus on inflation when he noted that medium-term growth prospects would be best strengthened by ‘keeping inflation expectations anchored and breaking the persistence of core inflation’. That inflation remains the key risk to the growth outlook, notwithstanding the easing in the headline print for retail price gains over November and December, was stressed by the MPC. The MPC’s decision to raise rates by a marginally smaller 25 basis points (bps) this time following its December decision to temper the tightening to 35 bps after three straight half percentage point increases, shows it is cognisant of the growth-retarding challenges that rising credit costs could pose to the ongoing post-pandemic recovery. Still, the fact that the Indian economy has proved more resilient, underpinned by a rebound in domestic demand especially for contact-intensive services and discretionary spending, has provided a degree of comfort to monetary policymakers. The unequivocal assertion of Das that monetary policy must be “tailored to ensuring a durable disinflation” rightly echoes a recent blogpost by three IMF economists who warned that central banks need to stay resolute as any ‘premature loosening’ of policy risks a sharp resurgence in price gains that could leave countries susceptible to further shocks. Ultimately, price stability is and must remain the bedrock for a durable economic recovery.