To be or not to be Rajan

If Reserve Bank of India (RBI) Governor Raghuram Rajan can quote Rudyard Kipling (he quoted from the poem If in his first statement after assuming office), economists who follow the governor's every move obviously don't want to be far behind. Pranjul Bhandari, chief India economist, HSBC India, is one of them. In a note titled "RBI's last mile", Bhandari has chosen Hamlet to explain what the central bank could do in the monetary policy slated for this Tuesday: "While it may be easy to use the first line from Hamlet's soliloquy 'to be or not to be' to describe dilemmas such as whether the RBI should cut rates, what many overlook are the next four lines of the speech, which provide a vivid description of the conflict. We believe this is how the RBI is ruminating these days:

"Whether 'tis nobler in the mind to suffer (read: react to)/The slings and arrows of outrageous fortune (read: volatile commodity prices),/Or to take arms against a sea of troubles (read: clamour for rate cut),/And by opposing (read: keeping rates flat),/end them (read: bring down stubbornly elevated inflationary expectations)."