This prompted the Reserve Bank to resort to both conventional and unconventional monetary policy alongside other regulatory policies to stabilise markets. Finally, while the exit from QE increases uncertainties in the financial market, it is increasingly felt that continuation of unconventional monetary policy for long could create risks in the global economy it sought to address by preventing deleveraging and appropriate pricing of risks.
In addition, the current policy response has increased sovereign risk in a number of countries which circumscribes the ability of policy to cushion further unexpected shocks. Thank you. 8  12  Rajan, Raghuram (2013), “A Step in the Dark: Unconventional Monetary Policy after the Crisis”, Andrew Crockett Memorial Lecture delivered at the BIS on June 23. BIS central bankers’ speeches