Cho­rus of Voice Against RBI is Un­just

The Day After - - FROM THE EDITOR'S DESK - Gourav Sinha, Patna

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.

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