RBI and letter
It is for the first time in the history of the Reserve Bank of India (RBI), and for that reason any central bank, that the Governor of the RBI has said that the RBI’s communication to the Government for missing inflation targets and charting out details on when it is likely to achieve the target of 4% (against the prevailing mark of 7%, which is only expected to go up further), will not be available to the public (“RBI says letter to govt. on missing inflation target not to be made public”, September 30). With the repo rate having been raised by 190 bps within a very short period of four months (which is unprecedented) and the rupee against the dollar moving fast to touch the 90 mark (despite the RBI’s repeated interventions to stabilise the fast weakening rupee at the cost of India’s forex reserves), it becomes understandable why the RBI wants to keep its letter away. Perhaps the RBI wants, or wanted, to be blunt in detailing the real reasons for the sorry state of affairs in the country.
Tharcius S. Fernando,
