Fixed monetary policy not possible, says RBI chief

February 10th, 2009 - 10:51 pm ICT by IANS  

New Delhi, Feb 10 (IANS) Reserve Bank of India (RBI) Governor D. Subbarao Tuesday said a fixed roadmap for monetary policy was not possible because of the “uncertainty” at global level.

“In this current global scenario, there is a lot of uncertainty and a bit of nervousness in central banks across the world. There can’t be a fixed roadmap in such uncertainty,” Subbarao told reporters here on the sidelines of the launch of Deputy Governor Rakesh Mohan’s book.

He added that the last three months have been very uncertain and there have been dramatic changes on the economic front.

“One criticism on RBI is that we are not aggressive enough and our response has been incremental (to the crises). But the speed and quantum with which Indian central bank has acted in the last three months is much more than the initiatives taken by many countries,” he said.

Commenting on India’s approach to the crises, Subbarao said: “Countries have responded differently to the global financial crises because their situations vary. In rich countries crises moved from the financial sector to the real sector but in India the crises travelled from real sector to the financial sector.”

Former RBI governor C. Rangarajan, who was also present at the function, said the monetary policy has to be changed in current times. The sole objective of the policy should be stimulating growth, he added.

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