Andy Mukherjee’s article “Time for bonds to ‘Reawaken India’” (June 19) is thought provoking. The Reserve Bank of India (RBI) should have adopted innovative measures to manage the rupee’s volatility. But it is stuck in a time warp and uses the same old blunt policy instruments. It is clear now that the drastic increase in interest rates to check inflation has not yielded the desired results; instead, it ended up hurting growth. Now even if policy rates are reduced dramatically, growth will need considerable time and fiscal support to pick up. Inflation has become almost insensitive to interest rates since it is impacted more by supply side constraints. There is a need for reform in RBI and more professionals who can think out of the box and be more innovative and quick decision-makers.
M Vijayan Chennai
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