1  2  and moral suasion by the Reserve Bank to restrain banks from extending credit for speculative purposes. Monetary Targeting 5. Against the backdrop of high inflation amidst rising fiscal  dominance, a rule-based monetary targeting framework was adopted on the recommendations of the Sukhamoy Chakravarty Committee (1985).
And, more fundamentally, if a lack of structural reforms leads to permanent divergence within the monetary union, this raises the specter of exit – from which all members ultimately suffer. In the euro area, stability and prosperity anywhere depend on countries thriving everywhere. So there is a strong case for sharing more sovereignty in this area – for building a genuine economic union.