While price stability remains the dominant objective, financial stability has been recognized an explicit objective of monetary policy. We have used macro-prudential measures even before the crisis as a stabilization instrument. Our approach to financial sector reforms and liberalization of the capital account has been cautious and gradual.
We recognize that improving access to credit to certain sectors through sector specific policies should be integral to monetary policy. We are also vigorously pursuing financial inclusion as an intermediate objective to promote inclusive growth. We, in the Reserve Bank, would need to reflect more closely on the key messages from Prof Stiglitz to strengthen the micro-foundations of macro-economic policies.