The monetary measures announced by Reserve Bank Governor Y V reddy, just little over a month before his term ends, may well be his swan song in his quest to contain inflation.
NEW DELHI: The monetary measures announced on Tuesday by Reserve Bank Governor Y V reddy, just little over a month before his term ends, may well be his swan song in his quest to contain inflation.
Reports have suggested that government may not extend his term beyond early September, though there is no official word on it.
When contacted, a Finance Ministry official, who did not want to be identified, said that no call has yet been taken on it, while debunking reports that there are differences between the RBI and the government.
Reddy's first year in office as Governor in 2003 saw India clocking an economic growth of 8.2 per cent and the latest forecast of 8 per cent GDP expansion in FY'09 offers little to cheer for.
He is scheduled to retire in the first week of September, while RBI's next policy review is slated for October 24.
Reddy, in a speech at a bankers' conference in Switzerland recently, had raised certain basic issue on the autonomy of the central bank leading to speculation about the differences he had with the government.
As the 21st Governor of the RBI, he presented his first monetary policy, a mid-term review, in November 2003 and Tuesday's review was his 17th.
Reddy, a 1964 batch IAS officer, quit the government to join RBI as Deputy Governor in 1996 and therafter worked as India's Executive Director at IMF in Washington before returning to the central bank as its head.
To provide for frequent review of the monetary policy in view of the rapidly changing economic scenario, Reddy introduced the quarterly review of the policy from 2005-06.
Earlier, there used to be one annual policy and one mid-term review of the monetary policy in the second half of the fiscal, popularly known as busy season credit policy.
Reddy had justified the need for quarterly review of monetary policy, pointing out that "it would provide the opportunity for structured communication with markets on a more frequent basis while retaining the flexibility to take specific measures as the evolving circumstances warrant."
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