A debate is occurring between the Indian government and the Reserve Bank of India (RBI) regarding the effective interest rate, which signifies a change in their relationship.
This is the first time in almost six years that RBI Governor Shaktikanta Das is facing a differing perspective from the government on interest rates, similar to past conflicts between former Finance Minister P. Chidambaram and RBI Governor Duvvuri Subbarao.
The ongoing discussions raise questions about the possibility of a repo rate cut in the near future, highlighting the complexities of monetary policy in a global context as India evaluates its economic strategies in comparison to international practices.