Experts Should Keep Setting India’s Rates, Not Flunkies
6 days, 3 hours ago

Experts Should Keep Setting India’s Rates, Not Flunkies

Live Mint  

-- In the very near future, we will learn the identities of three new “external” members of the Reserve Bank of India’s six-person monetary policy committee. The very existence of a monetary policy committee is one of Prime Minister Narendra Modi’s most important achievements. Modi’s officials often pat themselves on the back for transforming India’s economy from when it was numbered among the “fragile five” most exposed to the 2013 “taper tantrum.” While it helps that the finance ministry has been careful not to overspend, the credibility of a genuinely independent central bank has played an even greater role in that success. The bank’s credibility, India’s macroeconomic stability, and Modi’s own popularity depend upon monetary policy remaining independent.

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History of this topic

Why RBI is central to the country’s economy
1 month ago

Why RBI is central to the country’s economy

New Indian Express  

The art of setting interest rates Maintaining macroeconomic stability and financial stability is the holy grail of any central bank. The pursuit of sustainable growth and low and stable inflation have been fundamental to central banking activities since the early 19th century, though financial stability got equal prominence, thanks to black swan events like the Great Depression of 1930s and …

RBI’s new monetary policy committee has its task cut out
4 years, 3 months ago

RBI’s new monetary policy committee has its task cut out

Live Mint  

The Reserve Bank of India on Tuesday announced that the meeting of the new monetary policy committee has been scheduled from 7 to 9 October. The newly inducted members include Prof. Ashima Goyal is Professor, Indira Gandhi Institute of Development Research, Prof. Jayanth R. Varma, Professor, Indian Institute of Management, Ahmedabad and Dr. Shashanka Bhide, Senior Advisor, National Council of …

Govt Names 3 Eminent Economists as Members to RBI's Monetary Policy Committee
4 years, 3 months ago

Govt Names 3 Eminent Economists as Members to RBI's Monetary Policy Committee

News 18  

The government on Monday appointed three eminent economists Ashima Goyal, Jayanth R Varma and Shashanka Bhide as members of the rate-setting Monetary Policy Committee of the RBI, sources said. The new members replace Chetan Ghate, professor at the Indian Statistical Institute; Pami Dua, director at the Delhi School of Economics ; and Ravindra Dholakia, professor at the Indian Institute of …

Indian economy set to be bigger than UK’s this year
6 years ago

Indian economy set to be bigger than UK’s this year

Live Mint  

India’s economy grew at a faster pace than most major nations in 2018, and this year, it’s poised to overtake the U.K. to become the world’s fifth-biggest. The outcome of a general election due by May is a potential pitfall for a nation already battered by emerging market turmoil and a currency rout last year. Monetary Policy After raising interest …

Facts, No Fiction: There’s a new sheriff in RBI
6 years, 1 month ago

Facts, No Fiction: There’s a new sheriff in RBI

Op India  

This week has been a roller coaster ride, from high profile extradition cases, the resignation of the RBI governor and the results of recent assembly elections. That being said, it is well acknowledged that India has one of the tightest of monetary policies and that too at a time where inflation seems to be significantly lower than even RBI’s estimates. …

Govt wants RBI to set up committees to oversee different functions
6 years, 1 month ago

Govt wants RBI to set up committees to oversee different functions

Live Mint  

Mumbai: The government has proposed changing rules that will enable closer supervision of the central bank, people with knowledge of the matter said. The government has recommended that the board of the Reserve Bank of India draft regulations to enable setting up of panels to oversee functions including financial stability, monetary policy transmission and foreign exchange management, the people said, …

The RBI Shouldn’t Mix ‘Autonomy’ With the ‘Scope’ of Its Mandate
6 years, 2 months ago

The RBI Shouldn’t Mix ‘Autonomy’ With the ‘Scope’ of Its Mandate

The Quint  

Let’s take the proposition further. If, indeed, technocrats are more capable of taking long-term decisions, why leave fiscal policy in the hands of elected representatives? The reason that fiscal policy has not been delegated to technocrats is that it has multiple welfare and distributional effects that are best-weighed by elected representatives. Monetary policy, with its focus on inflation, is believed …

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