I borrow the title from Backstreet boys song, show me the meaning of being lonely but I have completely different interests in using these words.
In last few days two incidents of interest that happened were he import-Export policy and the RBI’s monetary policy review.
Given the background of high liquidity and high inflation, high interest rates owing to constraints in supply besides strengthening of the INR, I could not make out if the government and monetary regulatory were working in tandem.
The Exim policy continues to encourage exports with the background of constraints in supply and strengthening INR. I don’t know if exporter will be willing to export and suffer losses on account of exchange rate when they already are getting saddled by higher interest rates.
At the same time, the central bank comes and though it keeps all the rates intact, they encourage foreign investments and outward flow of forex which is in complete contrast to what Exim policy aims at. I understand that RBI’s endeavors are focused on containing the inflation and interest rates by pushing out the liquidity but I guess most of its efforts will be thwarted if Exim policy gets successful in increasing exports from India.
It would do well if some coherence is developed in various sections of governance and regulation in the country. If you can see it there, kindly show it to me.
