Power packed monetary policy | Business Line

Power packed monetary policy | Business Line


In Reserve Bank of India,
there was no change in approach to monetary policy, which was conceived as an
instrument for performing the mandated role of “securing monetary stability in
India and generally to operate the currency and credit system of the country to
its advantage”(see Preamble of RBI Act 1934), since the inception of the
central bank.

But discussions in the
media in recent years had reduced monetary policy as something closely related
to lending rates alone and RBI Governors were at the receiving end whenever
cost of credit went up. The change of guard in New Delhi and the international
acceptance of the credibility of the present RBI Governor have helped in
changing the public perception of fiscal and monetary policies and
understanding them as two engines which have to work in tandem to take the
India growth story forward.
M G Warrier


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