Role of central bank is important, crisis or no crisis

Unconventional monetary policy measures undertaken by the central banks during the crisis period worked mainly through the confidence and signaling channels, says Governor Das

Though there is no unique solution to these policy issues confronting the global economy, we could clearly draw three broad inferences:

First, the central banks’ role is important, both during normal as well as crisis times. While mandates for the central banks broadly remain same during both the periods, weightage attached to competing objectives and the choice of policy instruments become crucial in the crisis periods.

Second, communication by the central banks is very important that may be different in crisis times than in normal times. Not only it helps convey decisions in a more transparent way, it also signals the present