With reference to Anup Roy’s report, “RBI surprises with pause on rates” (December 8), the central bank has once again proved that its decisions are based on its perceptions, not influenced by the media, lobbying or other external agencies.
India was able to sail through economic crises only because monetary policy interventions and other measures by the Reserve Bank of India supported government policy.
Duvvuri Subbarao, on the eve of completing his five-year term as RBI governor on August 29, 2013, made the following observation: “There has been a lot of media coverage on policy differences between the government and the Reserve Bank. Gerard Schroeder, the former German chancellor, once said, ‘I am often frustrated by the Bundesbank. But thank God, it exists.’ I do hope finance minister P Chidambaram will one day say, ‘I am often frustrated by the Reserve Bank, so frustrated that I want to go for a walk, even if I have to walk alone. But thank God, the Reserve Bank exists.’”Subbarao’s successor, Raghuram Rajan, brought more transparency into RBI’s functioning and sorted out issues with the government during his three-year term.
M G Warrier Mumbai
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