Letters: RBI's smooth talk

This refers to the editorial "Focus on structural change" (October 1). The Reserve Bank of India's communication strategy has been quite efficient and effective inasmuch as its decision to hold the repo rate unchanged did not create a flutter. Economic agents could read the signals consistently emitted by the central bank and factored them into in their financial decision making. The Reserve Bank of India's communication policy has significant bearing on the smoothening of market volatility, which was triggered by the announcement of the monetary policy. The central bank can effectively talk the market smoothly up and down and help economic agents, including the government, anchor inflation expectations.

Biplab Chakraborty Kolkata

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