Reflecting on differences within the Reserve Bank, noted economist and RBI’s independent director Indira Rajaraman, on Thursday, said the central bank should not follow a straightjacket approach of controlling inflation.
“I think the RBI made things harder for itself by this straightjacket approach of committing themselves to inflation targeting when the whole world has abandoned this and has adopted financial stability as the objective of monetary policy,” Ms. Rajaraman said at an event.
RBI Governor Raghuram Rajan, who has been under fire for keeping the interest rates high for long, is targeting to keep CPI inflation at 8 per cent in January, 2015, and reduce it further to 6 per cent by 2016.
