Economies where inflation and credit growth are already high and budget deficits large, such as India, have less room to ease monetary or fiscal policy if the economy weakens.” There is merit in clarifying in detail the perception of the Reserve Bank in regard to these related observations.
At a general level, it is essential to recognise that the central banks concerned, being aware of the risks in respective jurisdictions, seek appropriate safeguards to ensure financial stability. India is no exception to this practice.