Low interest rates should not be a substitute for "other instruments of policy" and "various kinds of reforms" that are needed to encourage growth, Mr. Rajan said. “I think we’ve done exactly what was needed,” he said adding that the central bank should continue to prioritise low inflation. Mr. Rajan warned low interest rates globally could distort markets and would be difficult to abandon. Low interest rates should not be a substitute for “other instruments of policy” and “various kinds of reforms” that are needed to encourage growth, Mr. Rajan said. “I don’t think it’s fair to say that it’s because of tight policy that the government wanted to move on,” he said.

Source: The Hindu September 06, 2016 11:03 UTC