All eyes on RBI now

Posted: Saturday, Apr 26, 2008 at 2143 hrs IST
Updated: Saturday, Apr 26, 2008 at 2143 hrs IST

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: With reference to the excellent article (‘Supply side shows’, Apr 23), it is undeniably true that the Indian economy’s unprecedented boom has been a result of soaring domestic demand. The irony is that though inflation has now peaked to over 7% in the last three years, on account of enormous rise in purchasing power, inflation seems to have not pinched the common man so much as yet. This is a piquant situation arising out of globalisation. It was rightly said earlier that globalisation would lead to greater uncertainties, often requiring market regulators and the government to consistently and consciously realign policies in tune with the prevailing market dynamics. Having already raised the CRR now by 50 basis points, it would be interesting to watch how RBI is going to act on April 29 while presenting the Q1 review of its credit and monetary policy. Rightly so, liquidity management would emerge as the overriding priority.

—Srinivasan Umashankar Nagpur

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