RBI focus still on currency stability - The Hindu

RBI focus still on currency stability - The Hindu

Online comments posted on September 28. 2013:

The concluding observation: “If Dr. Rajan has indeed been subject to a quick conversion, it bodes well for the autonomy for which the RBI has come to be respected.” makes me recall my following comment in an article in The Global ANALYST(Sptember 2013):
“Once he gets a feel of the constraints with which RBI has been having a tight rope walk in harmonizing the monetary policy in the recent past with the unbridled fiscal policy guided by pulls and pushes of a coalition government at the Centre, Rajan is unlikely to toe the GOI line on fiscal deficit and Current account deficit, particularly that of the Finance Minister. As a corollary, the FM may not find an RBI Governor who will support his pet project FSLRC which has produced a report aimed at making RBI a ‘department’ of the Finance Ministry. The FM who put his Secretary Dr. D Subbarao as the Governor of RBI hoping to have a submissive Governor found a different person in Subbarao soon after he started functioning from Mint Road. In that context, perhaps, the FM is going to be ‘second time’ unlucky.”



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