Tough balancing act

RBI has a difficult task of meeting multiple targets

The Reserve Bank of India (RBI) continues to be diligent in its approach of doing the heavy lifting for the economy. Since consumer price inflation has been running above the tolerance band of the central bank for several months, the newly constituted monetary policy committee (MPC) has rightly decided to leave the policy rate unchanged. However, after the monetary policy review meeting on Friday, the RBI announced several measures to improve liquidity and bring down market rates. On its part, the MPC decided to look at the current inflation bump as transient and was of the view that it was