In a reaction to the monetary policy, economist SS Tarapore said, “ the RBI Policy Statement is an excellent document setting out with elan and style, the risks and opportunities. The relaxation of the CRR is a powerful instrument and one wonders whether the initial step of relaxation should have been the CRR. A better option would have been to undertake gradual forex purchases to prevent an appreciation of the rupee and augment the forex reserves; These operations would have also augmented domestic liquidity.
FPJ
