Exiting monetary policy stimulus a challenge: RBI

Exiting monetary policy stimulus a challenge: RBI
The Economic Times, November 11, 2009, Page 9

MUMBAI: RBI, which has begun exiting the easy money policy, on Tuesday said it found supporting growth without compromising financial stability a challenge, even as the government continues to be cautious about ending stimulus. An end to easy money policy could lead to higher cost of funds, which could hurt investments and stunt growth. “For the Reserve Bank, the challenge is to support the recovery process without compromising factors like the financial stability of economy,” RBI deputy governor Shymala Gopinath said at an IBA-organised seminar here. In the short term, exiting from the monetary stimulus, managing the capital flows and revival of domestic demand and consumption would also throw challenges to the policymakers, Mr Gopinath said.