Why it is just a ceasefire and not the end of the war between RBI and govt

This truce is a defeat for India's central bank

Many of us will have breathed a sigh of relief as, after a marathon eight-hour meeting on Monday, it looked like India’s government and its central bank had finally made peace with each other after weeks of very public sniping. Reports after the meeting stressed that the tone had been “conciliatory.” (The Reserve Bank of India’s own readout of the meeting was terse and uninformative.)

Yet relief may be premature. A closer look at what we know transpired suggests that, in fact, the government won a victory. And the loser wasn’t just the Reserve Bank, but India’s institutional stability.

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