Soon after the new governor of the Reserve Bank of India (RBI), Raghuram Rajan, assumed office, a committee was constituted to examine the current monetary policy framework and recommend ways to revise and strengthen it to make it more transparent.
In a period of 17 months, the Reserve Bank of India raised bank rates 11 times and now the repo rate is 8% and reverse repo rate 7%. This has caused a furore among industry and trade. Why?
