CHENNAI: Former Reserve Bank of India governor Duvvuri Subbarao said the challenge before RBI is to juggle between maintaining price stability, support growth and employment and preserve financial stability. Highlighting the decision to keep the repo and reverse repo rate unchanged in its bi-monthly monetary policy meeting on Thursday, he said RBI has made extraordinarily easy policy in the last two years.
“It was very necessary and the RBI took the right stance and has been instrumental in keeping the economy going but the concern is that the low interest rates and the enormous liquidity could potentially disrupt financial stability,” the former RBI Governor said while addressing 12th annual Great Lakes-Union Bank Finance Conference.
Subbarao said that the Central Bank has kept a pause on the policy stance, thereby trying to maintain the balance between growth and inflation. This was always a challenge for any central bank even in normal times and even a big challenge during a crisis like the current situation, he said.