RBI shifts gears, finally

Abstract

Prioritising jobs over inflation may go down well with the aam aadmi. The RBI could reduce repo rates further to spur investment and growth. The Monetary Policy announced by the RBI recently has been prepared in difficult times — domestically and globally. Domestically, all important parameters are causing concern — the growth rate is far below the trend; large twin deficits, especially current account deficit, poor flow of credit to industry and stubborn inflation.

Globally, the recovery in the US is subdued, and the economic situation in the euro area, the UK and Japan is still a matter of concern. In such an uncertain environment, the RBI has done a commendable job of signalling a change in approach and reducing, though very cautiously, the repo rate and the cash reserve ratio. Read more at: https://www.thehindubusinessline.com/opinion/columns/rbi-shifts-gears-finally/article20571899.ece1