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<b>Letters:</b> The right move

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Business Standard New Delhi

The edit “Passing the buck on policy” (January 25) made a cautious assessment of the current state of affairs, especially in the backdrop of the third quarter review of the monetary policy. Today, we are in an extremely difficult and complex situation and it is true that moderating growth rate has thrown up even greater challenges than inflation. The Reserve Bank of India (RBI) seems to be signalling that monetary policy actions alone cannot achieve the desired outcomes and that the Centre, on its part, must come up with credible policy initiatives and ensure fiscal consolidation. The cut in the cash reserve ratio by 50 basis points is an intelligent move to infuse liquidity into the system. It will enable banks to operate comfortably and will take care of the growth aspect without diluting key policy rates and letting inflation get out of control.

 

Srinivasan Umashankar Nagpur

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First Published: Jan 26 2012 | 12:10 AM IST

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