Abstract
This paper examines whether the prerequisites for a successful shift in the monetary policy framework are in place; whether economic conditions will prevent successful adoption of IT; or whether a different monetary approach would yield better results until key reforms can be undertaken. The economy, languishing in deep recession, has contracted considerably for three years. Since the recession is due in part to supply shocks resulting from sanctions (and now the pandemic), monetary policy will not, in principle, be the most potent tool for fighting inflation. Very likely, the budget will remain the government’s main tool for combating the recession. Fiscal considerations are thus very likely to dominate monetary policy and undercut the CBI’s goal of lowering inflation from the current 27 per cent to 22 per cent by end-March 2021.