Chorus of Voice Against RBI is Unjust
The RBI’s steadiness on rates was born of its belief that inflation was close enough to the bank’s target zone. Now, you might disagree with this belief — as I do — but there’s no question that the central bank’s monetary policy committee was doing its job as it saw it. The problem lay in the reaction to the RBI’s decision. Naturally, the rupee fell even further; markets had hoped for higher interest rates that would have encouraged foreign investors not to sell their rupeedenominated assets. A chorus of voices, some within the political establishment, began to complain that the RBI was ignoring the rupee, ignoring threats to growth and so on.