Opinion | Protecting the central bank’s independence
The government should avoid forcing decisions that could be seen as undermining the central bank
Reserve Bank of India (RBI) deputy governor Viral Acharya’s A.D. Shroff Memorial Lecture last week was the second occasion within a month when he chose to deliver a strong message. This time, it was on the importance of the central bank’s independence. His earlier remarks at the Indian Institute of Technology, Bombay, were focused on the prompt corrective action (PCA) framework. If this is an indication of a shift in the communication strategy, it would be a welcome change. Communication has not been the biggest strength of the present RBI leadership. As a sign of tension between the central bank and the government, however, it sounds a cautionary note.