Rajan has left his mark but risk of fiscal dominance remains
Vishrut Kansal argues more safeguards are needed if the RBI is to avoid fiscal dominance
Reserve Bank of India (RBI) governor Raghuram Rajan sent a letter to staff on June 18 announcing he would stand down from his position when his three-year term ends in September. In many respects, Rajan has laid the groundwork for the RBI's future work on monetary policy and a banking sector clean-up, but legal safeguards to keep the government from meddling in central bank affairs are still patchy.
With the passage of the Monetary Policy Framework Agreement (MPFA) dated February 20, 2015, the
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