RBI's policy perceptions: M G Warrier's media response


August 5, 2019
RBI’s policy perceptions
This refers to your editorial "Beyond the rate cut" (Business Standard, August 5). One is tempted to read this editorial side by side with Tamal Bandyopadhyay’s piece “Hobson’s choice before the Reserve Bank…” (Banker’s Trust) published in the same paper. After receiving and giving some shocks (Yes, the reference is to S C Garg led reference to Section 7 of RBI Act by finance ministry while communicating with then governor Urjit Patel and the premature exits of Patel and Viral Acharya), it is, seemingly, business as usual at Mint Road. The grace with which RBI handled the situation deserves appreciation.
After the constitution of Monetary Policy Committee, it has to be said to the credit of Centre that there has been less interventions from political leadership (read finance ministry) in the conduct of monetary policy by the central bank GOI also ensured that the MPC remained a body of professionals with continuity of incumbents.
RBI has all along been performing multiple roles in monetary policy formulation and supervisory functions besides management of currency, debt and forex reserves with success within the constraints emanating from growth and fiscal policy considerations. Let us hope the concerns expressed in your editorial and Tamal Bandyopadhyay’s article will be transparently addressed by the MPC during its current deliberations.
M G Warrier

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