This sizeable easing has ensured a comfortable liquidity position starting mid-November 2008 as evidenced by a number of indicators including the weighted average call money rate, the overnight money market rate and the yield on the 10-year benchmark government security. Taking the signal from the policy rate cut, many of the big banks have reduced their benchmark prime lending rates.
People downplay the importance of financial and price stability for the effectiveness of structural policies. How much green investment do you think we will attract if our financial system is unstable, and we cannot guarantee real returns!? The focus of central banks should be to deliver on their core mandates and create the space for government policies to drive structural changes.