RBI's potential not fully exploited


Subject: Rupee: Dollar-rupee swap: RBI chief between a rock and a hard place - The Economic Times


https://m.economictimes.com/markets/forex/dollar-rupee-swap-rbi-chief-between-a-rock-and-a-hard-place/articleshow/68460409.cms

My response:
Please read the last letter in the following link:

For: CHAT ROOM, Economic Times


March 19, 2019
Use RBI’s potential
This refers Andy Mukherjee’s piece “Is the RBI chief stuck between a rock and a hard place?” (March 19). The language used and the analytical approach are adequate to give the common man an impression that India’s central bank is in a “Chakravyooha” from which it may or may not get out post-elections. Though changes in Delhi do affect the incumbencies at the top level in RBI, the institution has a mind and unlike in government/s, policy continuation within the bank is fairly insulated from political influence.
This explains the multiple reasons being attributed to the new $5 billion swap move by RBI. Though for a single institution it has become somewhat unwieldy to manage its core central banking functions with responsibilities like financial inclusion and debt and reserves management, the institution has, over time become used to multiple-tasking and has used its different roles to support government in pursuing national priorities.
RBI has not so far received the recognition it deserved, mainly because it is compared with other central banks with limited central banking functions. For fear of loss of prominence, even Delhi is not using the immense capabilities of RBI in the country’s resources management. Scope exists for more coordination among policy formulators in Delhi (NITI Ayog included) and RBI.
M G WARRIER, Mumbai

 

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