Well-advised wait and watch stance
Well-advised wait and watch stance: The monetary policy panel rightly decided not to lower rates in uncertain times. But it was too tightlipped on demonetisation...
Apropos Usha Thorat’s article “Well-advised wait and watch stance” (HBL, December 8), one needs to concede that the policy statement together with the post policy announcement interaction with media by Team RBI lead by Urjit Patel have not left any of the policy-related issues ambiguous. As regards the concluding observation expressing surprise over unanimity in the Monetary Policy Committee (MPC) over decision-making, one presumes that, after deliberations, among the available options, every member was convinced about the ones finally accepted. This mature approach to team work is the opposite of the one adopted by Financial Sector Regulatory Reforms Commission where the Chairman wrote a monologue report setting aside several dissenting views expressed by members (several ‘dissenting notes’ were annexed to the report also!).
When there is lot of confusion in the air even about the motives of the November 8 announcement withdrawing the legal tender status of high value notes, though little late in the day, RBI has clearly come out with the central bank’s perceptions about currency management. The clarification that the measure by itself will not have an immediate impact on RBI Balance Sheet should set at rest the allegations about GOI having an eye on a windfall gain from ‘demonetization’. In the business of banking, trust is of paramount significance.
M G Warrier, Mumbai