RBI fields expectations

For those who failed to understand why the Reserve Bank of India (RBI) increases policy rates when inflation is a supply-side issue, a central bank official recently came up with an explanation. Drawing an analogy between the Indian cricket team and the RBI, he said, “It’s not that Harbhajan Singh is less important but when Sachin Tendulkar comes in to bat, the fielders are more alert. So the RBI hike is intended to control expectations rather than create a major change in the monetary policy stance.”