Vote of confidence

RBI has done well, but new external challenges can emerge

The Reserve Bank of India (RBI) has managed volatility on the external front in recent times remarkably well. The external value of the rupee, as a result, has been reasonably stable even as currency markets in some advanced economies witnessed heightened volatility. In this context, RBI Governor Shaktikanta Das rightly noted at the recent Business Standard BFSI Insight Summit that the inclusion of Indian government bonds in the JP Morgan Bond Index was a vote of confidence. He was also on the mark in saying that the inclusion was a double-edged sword. While the index inclusion will lead to inflows,