Towards a new RBI

...........The first task of PIR, and the new RBI, will be to study the determinants of inflation in India, and reconciliation of and explanations for the unusual phenomena of the CPI showing consistently higher rates of inflation than either the WPI or the GDP deflator. I have asked my staff to comprehensively answer the question before the next RBI meeting: What is going on with Indian inflation data and Indian inflation? Only after I receive their report will I decide on the future course of the single policy instrument — the repo rate. Watch this space — and we are not in the old-fashioned and outdated central bank game of surprises. There will be no mystery about what the new RBI is looking at: growth, core inflation and the rupee.

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