In November 2008, the Reserve Bank of India (RBI) reduced interest rates. Experts are concern thou because it appears that "... its efforts to keep the banking system liquid are somewhat stymied by an cause it holds dear: stabilizing the rupee."
The Economist, 11/6/200
According to the story, the RBI is following

Question

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The article mentions that the RBI's efforts to keep the banking system liquid are being hindered by their desire to stabilize the rupee, indicating that they may be following an exchange rate targeting rule. The Taylor rule and the McCallum rule are both monetary policy rules that suggest how central banks should adjust interest rates based on inflation and output gaps, which is not mentioned in the article. Friedman's k-percent rule is a monetary policy rule that suggests a constant growth rate for the money supply, which is also not mentioned in the article.

In November 2008, the Reserve Bank of India (RBI) Reduced