Whereas such measures appear desirable in order to strengthen the ability of central banks to ease liquidity pressures for large internationally active banks under emergency conditions, they may also imply additional legal and financial risks for the conduct of monetary policy operations that need to be fully assessed before taking any decisions.
July to early November data reveals that money supply is growing at 3.2% (compared to 2.5% in July-Nov FY07), and at 20.1 percent on YoY basis largely because of the pressures of Government borrowing and improvement in net foreign assets (NFA). M2 growth is still manageable given that in the first 5 months, private sector credit demand grew slower than preceding year.