Price stability should be main objective of central banks
Tuesday, 28 December 2010, 06:05 IST
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Chandigarh: Prime Minister's economic panel chairman C Rangarajan today said price stability must be the prime objective of the central banks in developing countries, a comment comes amidst fears of high inflation derailing economic growth prospects. Rangarajan, the chairman of Prime Minister's Economic Advisory Council, also said that interventions by monetary authorities to stabilise exchange rates should be exceptional cases. "Central banks need to be transparent and explicit with respect to their objectives ... among various objectives such as price stability, growth and financial stability, the dominant objective for central banks particularly in developing countries must be price stability," he said while speaking on the topic of 'Contours of Central Banking' Have They Changed' at the 93rd Annual Conference of Indian Economic Association here. He noted that tying central banks to a specific target of inflation may be too restrictive and may even be counter productive.
Source: PTI
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