UPSC Prelims 2018 · CSAT (Paper 2) · Q73
Basic Numeracy
Medium · Graph interpretation
A country's central bank policy interest rate over five quarters is: Q1=6.5%, Q2=6.5%, Q3=7.0%, Q4=7.5%, Q5=7.5%. Over the same period, retail inflation rose from 4% in Q1 to 7% by Q4, before easing slightly to 6.5% in Q5. What is the most likely reason the central bank raised its policy rate between Q2 and Q4?