The two articles ‘RBI has jumped the gun' and ‘What is ‘aam aadmi' to make of RBI's gambit?' (Business Line, April 20) decipher the implications of a ‘caged' monetary policy for the economy and, more particularly, for the common man. One, top echelons in government pre-empt any manoeuvrability available to the RBI by explicitly stating the direction and extent of relaxation in monetary policy. Two, a soft repo rate leads to arbitrage operations by banks borrowing from the RBI and investing in certificate of deposits. Three, insensate window-dressing by banks contaminate parameters on which policies are built. It is time the political bosses started looking at grass-root level improvements. .
- M. G. Warrier, Thiruvananthapuram
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