surprising behaviour of govt. but RBI footprints are predictable

by jiwant | January 25, 2011 at 10:39 am
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“Monetary policy works most efficiently while dealing with an inflationary situation when the fiscal situation is under control.govt. is failing to control inflation due to wrong measures taken by ministers. monetary policy is good for long term inflation control.here when supply side is making all trouble for common man govt. still backing monetary measures. where all RBI moves were predictable for all of us. The governor has raised the key policy rates by 25 basis points (bps) each, the seventh hike in the current fiscal, and refrained from a more aggressive action as he feels the growth prospects for the economy in the next fiscal are somewhat uncertain.With this, the repo rate, at which RBI infuses liquidity into the banking system, has gone up to 6.5% and the reverserepo rate, at which it drains money from the system, to 5.5%. This act of RBI is not going to curb the inflation. here role of agriculture minister is questionable, where is he? what were the steps taken by him or ministry? If govt. awake we will get relief from inflation whiten 15 teen days   so we can say govt is sleeping with sleeping pills, where RBI fail to surprise us. 

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