The decision to stand pat was widely expected after the annual rate of consumer inflation increased in October to 3.58%, driven by higher food and crude oil prices.
Any flippant talk of rupee devaluation would only damage India’s reputation as a credible, mature emerging economy and make crucial imports more expensive.
Prachi Mishra, a Columbia University-trained economist who spent nearly 10 years working for the IMF, joined the RBI as a “specialist adviser” in November 2014.
The latest refusal to cut rates, and the MPC’s decision to decline meeting with finance ministry officials before its deliberations on monetary policy, will be hailed by those who are interested in good governance.
The MPC records the fact that during demonetisation there were “fire sales” of essential items that depressed prices. The unusually sharp fall in CPI inflation in April cannot be taken for granted.
The discourse around non-performing assets (NPAs) remains largely focused on private corporations, while NPA concentration in public sector undertakings flies under the radar of scrutiny.
Both the former and current RBI governors are surely acquainted with the Gujarati saying “Kona Baapni Diwali”. This cannot be the Centre’s stance when it comes to solving India’s NPA crisis.
No matter what steps the government takes, the Indian economy will not revive till real interest rates are lowered.
The RBI governor also stated that Rs 9.2 lakh crore has been introduced into the economy in the form of new notes since November 8.
It is dangerous for the government to seek financial stability at the cost of people who entrust their money to banks.
When the RBI signed off on demonetisation, its central board had the lowest number of directors in 15 years and only three truly independent directors.
The RBI’s decision to support the note ban and its flawed implementation have exacted a price from the economy in general but the poor in particular.
Everyone knows why the previous governor of RBI had to leave. Urjit Patel understands the circumstances under which he assumed charge but has still risen to the occasion.
Perhaps the biggest casualty of demonetisation has been the central bank’s loss of autonomy as it has allowed the government to ride roughshod over it.
By avoiding questions on when the situation will normalise and suggesting that the growth forecast doesn’t take into account the transitory impact of demonetisation, Urijit Patel is shunning responsibility.
Arvind Subramanian’s earlier statements indicate he has been against the idea of “Big Bang” reforms, arguing instead for an incrementalist approach.
Patel spoke to PTI about the measures being enacted by the RBI and government to ease the process of demonetisation and the reasons behind the move.
Are we heading towards an authoritarianism that curbs our freedom to spend our own money?
As the unorganised sector continues suffering, civil society members, bankers and politicians remain sceptical of demonetisation’s impact on black money.
The policy statement put out by the RBI is consistent with an accommodative stance of monetary policy and has largely unexceptional goals.
There is a need to coordinate efforts to direct credit to the crucial sectors of the economy to stimulate growth, otherwise the same mistakes made in the past with infrastructure loans will be repeated
Patel’s nomination has been hailed as an example of continuity of Raghuram Rajan’s policies; if this is so, then what was the need to let Rajan go in the first place?
An ‘inflation warrior’, Patel is the eighth deputy governor in the Reserve Bank’s history to be made its governor and the sixth with experience at the IMF.
There is no dearth of talent to replace him as head of the Reserve Bank. But the question analysts are asking is how much freedom his successor will have.