Economics

 Bangladesh Bank 

UNITED NATIONS ECONOMIC AND SOCIAL COMMISSION FOR ASIA AND THE PACIFIC Regional High-Level Workshop on “Strengthening the Response to the Global Financial Crisis in Asia-Pacific: The Role of Monetary, Fiscal and External Debt Policies” 27-30 July 2009 Dhaka, Bangladesh

Breakout Session on Monetary Policy

Global Financial Crisis and Monetary Policy Response: Experience of India

By B.M.Misra Adviser Department of Economic Analysis and Policy Reserve Bank of India, Mumbai.

July 2009

The views expressed in the paper are those of the author(s) and should not necessarily be considered as reflecting the views or carrying the endorsement of the United Nations. This paper has been issued without formal editing.

Global Financial Crisis and Monetary Policy Response: Experience of India

The global financial crisis has called into question several fundamental assumptions and beliefs governing economic resilience and financial stability. What started off as turmoil in the financial sector of the advanced economies has snowballed into the deepest and most widespread financial and economic crisis of the last 60 years. With all the advanced economies in a synchronised recession, global GDP is projected to contract for the first time since the World War II, anywhere between 0.5 and 1.0 per cent, according to the March 2009 forecast of the International Monetary Fund (IMF). The emerging market economies are faced with decelerating growth rates. The World Trade Organisation (WTO) has forecast that global trade volume will contract by 9.0 per cent in 2009. Governments and central banks around the world have responded to the crisis through both conventional and unconventional fiscal and monetary measures. Indian authorities have also responded...