Sound Move, Reserve Bank

With the concrete measures now taken by the RBI, the rupee is beginning to settle at around 60-61 against the dollar, much to the relief of exporters. Against this backdrop, the RBI has preferred further easing of liquidity by cutting the marginal standing facility rate. The ongoing festival season that is to stretch up to March next year is expected to create a rise in demand, leading to credit expansion. The  lending and deposit rates of banks to that extent might require some alignment. In a nutshell, it is a welcome development by the RBI to make conditions more conducive for banks to operate, which will contribute the growth of the economy. The important thing is that Dr Rajan has successfully tried to restore much needed confidence in the markets, which is a right beginning to take the economy forward to high-growth terrain.

- SRINIVASAN UMASHANKAR, Nagpur (ET)