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LATEST NEWS UPDATES | The perils of RBI's fixation on inflation -Pulapre Balakrishnan

The perils of RBI's fixation on inflation -Pulapre Balakrishnan

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published Published on Jan 17, 2020   modified Modified on Jan 17, 2020
-The Hindu

The central bank’s shift of focus from financial stability to inflation targeting could have led to regulatory infirmity

Inflation is back in the news and attention has willy-nilly turned on the Reserve Bank of India (RBI). This would lead us to recognise what the central bank is mandated to do and assess how much of its objective it actually achieves.

The establishment of some of the world’s oldest central banks was inspired by the goal of maintaining financial stability. It was recognised that when private commercial banks fail, whether due to malfeasance or misjudgment, they not only harm their trusting depositors, they can also take down with them the rest of the financial system.

Please click here to read more.

The Hindu, 17 January, 2020, https://www.thehindu.com/opinion/lead/the-perils-of-rbis-fixation-on-inflation/article30578704.ece?homepage=true


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