scholarly journals Analysing Monetary Policy Statements of the Reserve Bank of India

2019 ◽  
Author(s):  
Aakriti Mathur ◽  
Rajeswari Sengupta
Keyword(s):  
Monetary Policy ◽  
Reserve Bank ◽  
Policy Statements ◽  
Reserve Bank Of India

scholarly journals Evaluation of the Inflation Forecasting Process of the Reserve Bank of India: A Text Analysis Approach

2020 ◽  
Author(s):  
Amrendra Pandey ◽  
Jagadish Shettigar ◽  
Amarnath Bose
Keyword(s):  
Monetary Policy ◽  
Policy Framework ◽  
Quantitative Methodology ◽  
Inflation Forecasts ◽  
Inflation Forecasting ◽  
Monetary Policy Committee ◽  
Reserve Bank ◽  
Policy Statements ◽  
Economic Reality ◽  
Reserve Bank Of India

<div><div><div><p>This study is an attempt to evaluate and interpret the monetary policy statements (MPS) of the Reserve Bank of India (RBI) for the five year period since it started conducting monetary policy meetings every alter- nate month. An important contribution of this paper is the evaluation of the inflation forecasting path of the RBI using information from the state- ments. Both qualitative and quantitative methodology has been adopted to study and evaluate the MPS. It helps in understanding processes fol- lowed and information considered while making inflation forecasts. The results clearly indicate that though the RBI examined the high frequency economic indicators in their process of assessment and inflation forecast- ing, their inflation forecasts have been below the mark. Similarly, the monetary policy committee (MPC) could not predict the sharp disinfla- tion following demonetization on 8th November, 2016 resulting in higher real interest rate regime. This shows that the monetary policy governance under the new monetary policy framework of the RBI needs to be revisited to align it with the economic reality of India.</p></div></div></div>

scholarly journals Evaluation of the Inflation Forecasting Process of the Reserve Bank of India: A Text Analysis Approach

2020 ◽  
Author(s):  
Amrendra Pandey ◽  
Jagadish Shettigar ◽  
Amarnath Bose
Keyword(s):  
Monetary Policy ◽  
Policy Framework ◽  
Quantitative Methodology ◽  
Inflation Forecasts ◽  
Inflation Forecasting ◽  
Monetary Policy Committee ◽  
Reserve Bank ◽  
Policy Statements ◽  
Economic Reality ◽  
Reserve Bank Of India

<div><div><div><p>This study is an attempt to evaluate and interpret the monetary policy statements (MPS) of the Reserve Bank of India (RBI) for the five year period since it started conducting monetary policy meetings every alter- nate month. An important contribution of this paper is the evaluation of the inflation forecasting path of the RBI using information from the state- ments. Both qualitative and quantitative methodology has been adopted to study and evaluate the MPS. It helps in understanding processes fol- lowed and information considered while making inflation forecasts. The results clearly indicate that though the RBI examined the high frequency economic indicators in their process of assessment and inflation forecast- ing, their inflation forecasts have been below the mark. Similarly, the monetary policy committee (MPC) could not predict the sharp disinfla- tion following demonetization on 8th November, 2016 resulting in higher real interest rate regime. This shows that the monetary policy governance under the new monetary policy framework of the RBI needs to be revisited to align it with the economic reality of India.</p></div></div></div>

scholarly journals Evaluation of the Inflation Forecasting Process of the Reserve Bank of India: A Text Analysis Approach

SAGE Open ◽  
2021 ◽  
Vol 11 (3) ◽  
pp. 215824402110338
Author(s):  
Amrendra Pandey ◽  
Jagadish Shettigar ◽  
Amarnath Bose
Keyword(s):  
Monetary Policy ◽  
Policy Framework ◽  
Inflation Forecasts ◽  
Inflation Forecasting ◽  
Monetary Policy Committee ◽  
Reserve Bank ◽  
Governance Practices ◽  
Policy Statements ◽  
Research Findings ◽  
Reserve Bank Of India

This study attempts to evaluate the monetary policy of the Reserve Bank of India (RBI) based on an investigation of the policy statements. The analysis based on text mining of the central bank’s monetary policy statements seeks to unravel the information considered by the central bank and the processes followed in making its inflation forecasts. The findings indicate that although the RBI examined high-frequency economic indicators, its inflation forecasts have generally been off the mark. Specifically, the monetary policy committee failed to foresee the sharp disinflation that followed the demonetization announced on November 8, 2016. This failure resulted in a high real interest rate regime that dealt a blow to the economy staggering under the effects of demonetization. Our research findings show that the monetary policy governance practices need to be refined and better aligned to economic realities, particularly under the RBI’s new monetary policy framework.

The Monetary Policy of the Reserve Bank of India.

1949 ◽  
Vol 59 (235) ◽  
pp. 436
Author(s):  
Cecil Kisch ◽  
K. N. Raj
Keyword(s):  
Monetary Policy ◽  
Reserve Bank ◽  
Reserve Bank Of India

scholarly journals Is India Ready for Inflation Targeting?

2016 ◽  
Vol 16 (3) ◽  
pp. 479-509 ◽  
Author(s):  
Abhijit Sen Gupta ◽  
Rajeswari Sengupta
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Output Growth ◽  
Strong Impact ◽  
Committee Report ◽  
Reserve Bank ◽  
Exchange Rate Changes ◽  
Nominal Anchor ◽  
Macroeconomic Environment ◽  
Reserve Bank Of India

In this paper we analyze the extent to which the current macroeconomic environment in India is suitable for implementation of inflation targeting as a monetary policy strategy, in light of the recommendation of the Urjit Patel Committee Report. Our results indicate that historically the Reserve Bank of India has given more importance to inflation compared to output growth and exchange rate changes in its monetary policy conduct and that in recent times there has been an increased emphasis on monetary independence thereby comfortably placing the RBI on a path to move towards inflation targeting. However we also find factors, that are traditionally outside the control of monetary policy, do exert a strong impact on aggregate prices in India thereby making the choice of nominal anchor a tricky one. Furthermore, the success of monetary policy in containing inflation is found to be crucially contingent on an appropriate fiscal policy as well.

Policy Trilemma in India: Exchange Rate Stability, Independent Monetary Policy and Capital Account Openness

2017 ◽  
Vol 17 (3) ◽  
pp. 20170012 ◽  
Author(s):  
Sayantan Bandhu Majumder ◽  
Ranjanendra Narayan Nag
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Foreign Exchange Market ◽  
Capital Account ◽  
Ample Evidence ◽  
Long Run ◽  
Reserve Bank ◽  
Short Run ◽  
The Cost ◽  
Reserve Bank Of India

This paper aims to investigate the situation of policy trilemma in India. Analysing the quarterly data from 1991 to 2015, we find that though the trilemma constraint is binding in the long run, there is ample evidence of short-run deviations from the constraint. Intervention in the foreign exchange market by the Reserve bank of India has successfully helped to relax this constraint. The policy mix has changed over this period – the degree of capital account openness has gradually increased, mainly at the cost of exchange rate stability. We further examine the determinants and the macroeconomic effects of the trilemma policy configuration. We find that the trilemma efficiency depends on the financial stress, financial development, intervention by the Central bank and the liquidity in the economy. Higher monetary policy independence helps to reduce the inflation rate while exchange rate stability and capital account openness are associated with the higher growth rate and the larger output gap.

Central Bank Communications and Professional Forecasts: Evidence From India

2021 ◽  
pp. 097265272110440
Author(s):  
Ashima Goyal ◽  
Prashant Parab
Keyword(s):  
Monetary Policy ◽  
Inflation Targeting ◽  
Jel Classification ◽  
Inflation Expectations ◽  
Speed Of Adjustment ◽  
Inflation Forecasts ◽  
Monetary Policy Committee ◽  
Reserve Bank ◽  
Policy Statements ◽  
Repo Rate

We analyze the influence of qualitative and quantitative communications of the Reserve Bank of India (RBI) on inflation expectations of professional forecasters and draw out implications for policy. Estimating Carroll-type epidemiological models of expectation formation under information rigidities, we get a large speed of adjustment of professional forecasters’ expectations. Analysis of the determinants of inflation forecasts, inflation surprises, and forecaster disagreement reveals significant influence of quantitative RBI communications in the form of inflation projections. This effect is prominent for shorter-horizon forecasts and after adoption of flexible inflation targeting. Macroeconomic fundamentals like lagged inflation and repo rate also significantly influence inflation forecasts. Choice of words in the RBI monetary policy statements has more impact after October 2016, when the monetary policy committee became the decision-making body. JEL Classification: E31, E52, E58

Monetary Policy of Reserve Bank of India: Role of Bank Lending

2015 ◽  
Vol 4 (3) ◽  
pp. 33 ◽  
Author(s):  
Subhalakshmi Sircar ◽  
Sandeep Goel
Keyword(s):  
Monetary Policy ◽  
Bank Lending ◽  
Reserve Bank ◽  
Reserve Bank Of India

The Monetary Policy of the Reserve Bank of India: A Study of Central Banking in an Undeveloped Economy.

Economica ◽  
1949 ◽  
Vol 16 (63) ◽  
pp. 281
Author(s):  
J. S. G. Wilson ◽  
K. N. Raj
Keyword(s):  
Monetary Policy ◽  
Central Banking ◽  
Reserve Bank ◽  
Reserve Bank Of India
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