This can be attributed to structural weaknesses of the agriculture sector reflected in low level of public investment, exhaustion of the yield potential of new high yielding varieties of wheat and rice, unbalanced fertiliser use, low seed replacement rate, an inadequate incentive system and post harvest value addition.
As the recent experience has shown, price stability is a necessary but not a sufficient condition for financial stability. Therefore, the need to look for adequate instruments to preserve financial stability has become imperative after the crisis. Given the far reaching effects that the main monetary policy tool, i.e.