Reserve Bank of India (RBI) Governor Raghuram Rajan is clearly readying for the long haul. After taking measures to stabilise the currency, in which he has succeeded, he is now focusing on resolving various other issues - high retail inflation, as well as Wholesale Price Index (WPI)-based inflation, which is showing an upward trend. "The internal value of the currency also determines the external value," Rajan said in a press conference on Friday, indicating inflation had to be brought under control.
The day he took charge as RBI chief, Rajan had announced a series of steps to attract inflows. These steps have helped the rupeeappreciate 9.5 per cent since August 28, when it had hit an all-time low of 68.82/dollar. Though the US Federal Reserve's decision to continue with its asset purchase programme has helped the currency, Rajan said, "The postponement of tapering is only that, a postponement. We must use this time to create a bullet-proof national balance sheet and growth agenda, which creates confidence in citizens and investors alike." "What we need to do is put our house in order before it comes back," he added.
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