Restoring credibility

New team at RBI comes up with sound, consistent guidance

Recent events suggest that the Reserve Bank of India (RBI) is on the path to re-establishing its credibility. One widely expressed concern following the withdrawal of high-value currency notes last November was that the RBI, in the course of acquiescing to and implementing the programme, was in danger of losing a certain amount of credibility in the eyes of observers. Its hard-won reputation for independence and stability, bolstered by its decision to move to a monetary policy committee system and to formally become an inflation-targeting central bank, seemed to be under threat. However, it has in the recent past gone