The realpolitik of RBI - A Seshan

.....The decision of the Reserve Bank of India (RBI) to reduce the cash reserve ratio (CRR) is a recognition of realpolitik. One would have thought that its interpretation of the economic situation in the two documents related to the policy review made out a case for maintaining the status quo. The RBI is always under pressure before every review for liberalising its stance, something it could resist in the past, citing the continued trend of inflation over several months and the absence of economic reforms. It could take the correct stand that there should be a burden-sharing by the Government. Now, the Government claims to have done its duty with a host of reforms and has expected the central bank to keep its word and do its bit.......

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