Specifically, these alternatives involve (1) providing assurance to financial investors that short rates will be lower in the future than they currently expect, (2) changing the relative supplies of securities (such as Treasury notes and bonds) in the marketplace by shifting the composition of the central bank’s balance sheet, and (3) increasing the size of the central bank’s balance sheet beyond the level needed to set the short-term policy rate at zero (“quantitative easing”).
Second, we have to make the RBI more transparent. We need to improve communication at both technical and non technical levels. Third, at a very personal level, I would like to de-mystify the office of the governor.