Subbarao faces tight balancing act on interest rates

...... Subbarao’s predecessor Yaga Venugopal Reddy had an interesting view on the point of RBI listening to the finance ministry’s advice. Reddy would say, in his inimitable double-negative sort of way, that an argument need not be negated just because it came from the ministry. However, Reddy also believed action need not always be taken on a particular day just because there is a policy review, and could always be kept for an exact and appropriate time, and any reaction from the central bank must be purely ‘contextual’. It will be interesting to watch which of Reddy’s arguments Subbarao opts for this time.......

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