With reference to “Reform, do not rationalise” (May 7), the article argued very well that India’s complex foreign debt policy must be reformed instead of continuing with the command and control approach. The implicit view that all borrowings, domestic or foreign, should be treated equally is well reasoned. However, the conclusion that the Reserve Bank of India (RBI) should have a foreign debt policy framework that “addresses the potential market failures arising from unhedged currency debt” is misguided for multiple reasons.
First, the RBI’s legal mandate is to regulate the issue of bank notes, maintain monetary stability and operate currency and
