 "RBI, reserve bank of india")
The Reserve Bank of India (RBI) is precariously balancing two opposing objectives — maintaining easy financial condition in the domestic market, while ensuring external stability — and economists have started taking note. They say India is going through the classic trilemma of the ‘Impossible Trinity’.
The RBI cannot have an independent monetary policy (setting domestic interest rates) in an environment of an open capital account and flexible exchange rates.
What is even more complicated for the central bank now is that financial market stability overlays all the other three objectives. Hence, a senior economist also termed it as
The RBI cannot have an independent monetary policy (setting domestic interest rates) in an environment of an open capital account and flexible exchange rates.
What is even more complicated for the central bank now is that financial market stability overlays all the other three objectives. Hence, a senior economist also termed it as
