'Bankers and RBI officials are not fools'

On the subject of managing inflation, Union Finance Minister Chidambaram said in Bangalore on Saturday that bankers and Reserve Bank of India (RBI) officials are not “fools” and know their job well.

The response came when he was asked about the risk of inflation going up if interest rates are lowered to boost consumption. “People who make these decisions, bankers and RBI officials, must have done their math, isn't it? Give some credit to them, they are not a bunch of fools.”

He said he was confident of containing the current account deficit at $70 billion this fiscal. “Gold imports have sharply compressed in the second quarter. In the April -June quarter, India imported 335 tonnes of gold, but in the second quarter, the number has come down to about 65 to 70 tonnes.”

He also attributed the confidence to exports picking up “briskly and smartly” and the surge in FCNR (B) deposits to $5.6 billion, as informed by the Reserve Bank of India Governor Raghuram Rajan.