Calibrated and clearly communicated monetary policies will build trust and improve business sentiments across the world by leaving little room for speculations, Economic Affairs Secretary Arvind Mayaram said on Saturday.
“We believe monetary policy cooperation is extremely crucial in the current juncture. This calls for calibrated monetary policies by advanced economies which are communicated clearly among our central bankers and between central bankers and the market plus a willingness to listen to others,” he said.
Recent risks of very low inflation in euro areas might demand use of appropriate tools in the coming time to thwart deflation tendencies, Mr Mayaram said in his intervention at the G20 Finance Ministers and Central Bank Governors meeting.
Mr Mayaram is representing India during the ongoing spring meet of the International Monetary Fund and the World Bank.
“However... calibrated and clearly communicated policies will greatly act as trust builders and improve the business sentiments across the globe by leaving little room for speculations.
“In terms of exchange rate policy, while flexible exchange rates are desirable, a cautious approach should be followed before going for currency revaluations which can result in trust deficit and currency wars,” he said.