........The so-called approach of pursuing multiple-objectives gave operational flexibility; yet it also raised some questions about the understanding of the monetary transmission mechanism and framework in India. For example, not having inflation control as the primary objective at all times indicated the belief that inflation process is perhaps driven by non-monetary and structural factors not under the control of RBI. Lack of a consistent and clear stand on the issue of objectives of certainly contributed to spiralling inflationary expectations in the past few years. The principle of constructive ambiguity should not be about the thinking and formulation of monetary policy but about the communication..............
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