All signs point to the beginning of the end of easy money policies across the globe. The only question for the Reserve Bank of India (RBI) is of timing.

An uneasy calm prevails in the global markets. That’s because, while central banks of major economies have continued to pursue easy monetary policies to stimulate growth, there has been a sharp rise in inflation.

Systemically important ones, including the US Federal Reserve (Fed) and the European Central Bank (ECB), see this rise as transitory, and have chosen to tweak policy to become more inflation-tolerant. In emerging markets, some are moving ahead of the Fed in tightening, while others are staying accommodative.

The Reserve Bank of India (RBI), too, has been tolerant of inflation, with its Monetary Policy Committee (MPC) staying accommodative to support growth.

But the easy regime appears to be reaching its limit. The latest MPC actions signal so.

We expect the RBI to make a more definitive statement by this fiscal end, and raise rates by ~25 basis points (bps).

While inflation will be the key driver of this decision, other factors such as the strength of recovery (mainlydomestic demand) and policy normalisation by other major central banks will also matter.

In this edition of Quickonomics, we take note of key global central bank actions this year. We also analyse how inflation has fared in these economies relative to the tolerance band of their central banks. We then discuss our expectation on monetary policy action by the RBI.