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Indian Monetary Policy in the Time of Inflation Targeting and Demonetisation

dc.contributor.authorRakesh Mohan
dc.contributor.authorPartha Ray
dc.date.accessioned2018-09-10T17:20:30Z
dc.date.available2018-09-10T17:20:30Z
dc.date.issued2018-05-04
dc.identifier.urihttp://hdl.handle.net/11540/8568
dc.description.abstractThis paper provides a narrative of Indian monetary policy since the North Atlantic Financial Crisis (NAFC) in the mid-2008 till the current period. The period 2009-13 was dominated by the joint monetary and fiscal stimuli of the Indian authorities prompted by the NAFC. These, along with some structural shocks and a hands-off attitude in forex market intervention, could have had their role in rising inflation and external account instability (leading up to the taper tantrum episode). In this backdrop, after considerable discussion during 2013-2014, a Monetary Policy Framework Agreement (MPFA) was signed between the Government of India and the Reserve Bank of India (RBI) on February 20, 2015, which formally adopted flexible inflation targeting (IT) in India. Under the new statutory IT framework, a six-member Monetary Policy Committee (MPC) met for the first time on October 3 and 4, 2016. While the IT regime so far has coincided with significant reduction in inflation in India, the atmosphere has been benign. Now that fuel prices have started moving in the north-east direction, a revised framework for the Minimum Support Price (MSP) in the Union Budget for 2018-19 has been proposed by the government and fiscal slippages have started happening, it remains to be seen whether IT can withstand more rough weather in the days to come. Finally, in recent years, Indian monetary policy has been dominated by two significant events: the emergence of significant deterioration of Indian public sector balance sheets, and the demonetisation episode in November 2016. Monetary policy in both of these periods wrestled with fashioning an appropriate strategy for managing the impossible trinity.
dc.languageEnglish
dc.publisherBrookings India
dc.titleIndian Monetary Policy in the Time of Inflation Targeting and Demonetisation
dc.typeWorking Papers
dc.subject.expertMacroeconomic
dc.subject.expertMacroeconomic Analysis
dc.subject.expertMacroeconomic Framework
dc.subject.expertMacroeconomic Models
dc.subject.expertMacroeconomic Performance
dc.subject.expertMacroeconomic Planning
dc.subject.expertMacroeconomic Policies
dc.subject.expertMacroeconomic Reform
dc.subject.expertMacroeconomic Stabilization
dc.subject.expertResults-Based Monitoring And Evaluation
dc.subject.expertProject Evaluation & Review Technique
dc.subject.expertProject Evaluation
dc.subject.expertProgram Evaluation
dc.subject.expertPerformance Evaluation
dc.subject.expertOperations Evaluation
dc.subject.expertEvaluation Methods
dc.subject.expertEvaluation
dc.subject.adbSocial condition
dc.subject.adbEconomic dependence
dc.subject.adbEconomic assistance
dc.subject.adbInternational monetary relations
dc.subject.adbInternational monetary relations
dc.subject.adbInternational trade
dc.subject.adbNational accounting
dc.subject.adbMarket
dc.subject.adbProject impact
dc.subject.adbDevelopment projects
dc.subject.adbProgram management
dc.subject.adbPerformance appraisal
dc.subject.adbProject appraisal
dc.subject.adbTechnology assessment
dc.subject.naturalExchange
dc.subject.naturalComparative economics
dc.subject.naturalIndex number
dc.subject.naturalMonetary policy
dc.subject.naturalValue analysis
dc.subject.naturalAdjustment cost
dc.subject.naturalTransaction cost
dc.subject.naturalConditionality
dc.subject.naturalInternational relations
dc.subject.naturalCumulative effects assessment
dc.subject.naturalGrievance procedures
dc.subject.naturalParticipatory monitoring and evaluation
dc.subject.naturalExchange rate
dc.title.seriesWorking Paper
dc.title.volume4 May 2018
dc.contributor.imprintBrookings India
oar.themeEconomics
oar.themeEvaluation
oar.adminregionSouth Asia Region
oar.countryIndia
oar.identifierOAR-008146
oar.authorMohan, Rakesh
oar.authorRay, Partha
oar.importTRUE
oar.googlescholar.linkpresenttrue


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