RBI step doesn't signal monetary tightening: Raghuram Rajan

Chief Economic Advisor Raghuram Rajan on Wednesday saw no comparison between sliding macroeconomic parameters and global financial crisis, even as the Reserve Bank of India (RBI) opened a three-day repo borrowing window for mutual funds for the first time after the meltdown of 2008-09.

"The comparison that we are going back to the crisis is overstated," Rajan said when asked whether RBI's move signals that Indian economy was back to the 2008-09 crisis.

He said the RBI decision to tighten liquidity by raising borrowing rates for banks did not signal monetary tightening and was a short-term move. He said the intention was to curb rupee volatility.

"Both government and RBI were uncomfortable with the volatility and the attempt was to stabilise the currency and reduce volatility."