GDP growth is expected to be around 6.5 per cent in 2012–13 also. Despite the predominant domestic nature of Indian growth story, volatility in growth has brought to the fore the debate on the potential rate of growth and the role of macroeconomic policies in stabilising growth around the potential.
Improvements in global interbank markets, in turn, promote greater stability in other markets, such as money markets and foreign exchange markets. Although the provision of ample liquidity by the central bank to financial institutions is a timetested approach to reducing financial strains, it is no panacea.