A matter of trust.

"RBI Governor Shaktikanta Das...called the communication between the central bank and government privileged and said that the letter it would be writing for missing the inflation targets will not be made public." ET. "The Reserve Bank of India Act mandates that in the case of the inflation target not being met for three consecutive quarters, the central bank has to submit a report to the government explaining the reasons and detail the remedial actions it will be taking to check the price rise." ET. The RBI has a mandate to "keep the retail inflation at 4% with the margin of 2% at either side" till 31 March 2026. ET. Which means the government has given it a wide latitude of 2-6% but the consumer price index (CPI) inflation has been higher than the upper margin of 6% since January of this year. Trading Economics. The RBI's "letter to the government triggered by its failure to keep inflation within the target band, will likely blame supply side- issues for the runaway price rise, economists said." Mint. Since the RBI has no control on supplies it is helpless, so why is the letter a secret? Is it because it was following orders and can't say so publicly? "The US Federal Reserve, in charge of monetary policy in America, has been tightening financial conditions for six months now and inflation still doesn't seem to be budging," wrote Allison Schrager. "Inflation is largely self-fulfilling [in the US], so if people expect higher inflation, they ask for more money at work, raise prices on what they sell or on the rent they charge." "Many economists believe that inflation was so mild and stable for so many years because former Federal Reserve Chairman Paul Volcker demonstrated that the Fed was serious about controlling it in the 1970s [and 80s], even if it meant bringing on a recession." Consumer inflation in the US was 8.2% year-on-year in September compared to 8.2% in August. NBC. Despite that, "The median one-year-ahead household inflation expectation was lower at 5.4% in September. The three-year-ahead inflation expectation was even lower at 2.9%, only about 1% higher than the US inflation target," wrote Prof Vidya Mahambare & Praveen Kumar. In contrast, in India, "in July 2021, the median household inflation expectation for a year ahead was 11.5%. When the RBI did the survey a year later in July 2022, the median expectation for the same month was 9.3%. This is despite retail inflation during the previous 12 months being much lower, between 4.6% and 7.3%." Clearly, Americans trust their Fed while Indians have no trust in the RBI at all. Which is why, "India's gold imports, which have a bearing on the country's Current Account Deficit (CAD), rose 6.4 percent to USD 12.9 billion during April-July." ET. A study "Analysing returns of financial assets between June 1999 and March 2021" shows that "gold is an effective hedge against inflation," wrote Pramit Bhattacharya. Hiding behind the draconian British Official Secrets Act of of 1923, TOI, dating from a time when dogs and Indians were not allowed in selected places, BS, is unlikely to increase trust and lower inflation expectation. Put people first. At least once.