With climate risk raising insurance premiums charged to property owners or reducing the availability of insurance in certain geographies and on certain asset classes, it may be important to assess the resilience of insurance and other hedging strategies and the associated implications for supervised institutions.
3 It is believed that short-run inflation dynamics is largely dependent on supply-demand conditions and monetary expansion influences inflationary condition in the long-run. Monetary expansion could be caused by persistence of high fiscal deficit and the need to finance the same by monetisation. Consequently, high monetary growth could lead to continued excess demand for a prolonged period without matching increase in output and productivity.