RBI could see interest rate powers diluted by MPC proposals

Raghuram Rajan

The Reserve Bank of India (RBI) could see its control over interest rates diluted under the latest proposals for a monetary policy committee (MPC) at the central bank, which call for a majority of external members.

The policy framework at the RBI is changing. In February it agreed an inflation target with the government and a more formal arrangement for setting policy seems inevitable.

Exactly how the MPC will look is still up for debate. The ministry of finance published a draft ‘Indian Financi

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