Is it possible for Reserve Bank of inDIA TO CONTROL HIGH AND RISING INFLATION IN iNDIA?

Question

Is it possible for Reserve Bank of inDIA TO CONTROL HIGH AND RISING INFLATION IN iNDIA?

Answer 1

No Reserve Bank anywhere in the world has been successful at this for very long, especially if the exchange rates are floating.

Answer 2

No. Reseve Ban of India cannot really help much. This is all the more difficult if it has to go on buying and holding large and growing foreign exchange reserves. Also, when the Govt. of India runs such huge deficits even after collecting so much taxes, the money supply will continue to grow fast and sustain inflationary pressures,. There is no way the Reserve Bank of India can reduce crude oil prices or petroleum products.

So, RBI is the most inappropriate institution to look for help in reducing inflation.

If the Reserve Bank of India was really so powerful like God almighty, there would not have been inflation turning hyperinflation to begin with.