Surprise element

Apropos the editorial, “Cautious stance” (April 7), in what can be termed the most intelligent policy review in recent times, the Reserve Bank of India (RBI) while not tinkering with the key policy repo rate and maintaining a neutral stance, injected an element of surprise by raising the reverse repo rate by 25 basis points (bps).

This move narrowed the policy rate corridor from 50 bps to 25 bps indicating that the focus now is on taking out excess liquidity from the system and working towards achieving the medium-term target for consumer price index inflation of four per cent.

Following demonetisation last