Monetary policy: Governor Rajan’s imprimatur - Dr.S.S.Tarapore
Reserve Bank of India (RBI) Governor Raghuram Rajan’s maiden monetary policy presentation reflects his unmistakable imprimatur, pedigree, panache and style. Governor Rajan’s thoughts were clearly set out in the inaugural statement of September 4, 2013. As enshrined in the RBI Act, 1934, the primary role of the central bank is monetary stability which he unequivocally interprets as low and stable expectations of inflation, whether the inflation stems from domestic sources or from changes in the value of the currency, from supply constraints or demand pressures. This is a major departure from mainstream thinking in India which bemoans that monetary policy cannot handle structural or imported inflation. Rajan comes out as an inflation fighter irrespective of the source of inflation..........
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