Washington: Calibrated and clearly communicated monetary policies will build trust and improve business sentiments globally 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,” he said.
Recent risks of very low inflation in the euro zone might demand use of appropriate tools in the coming time to thwart deflation tendencies, Mayaram said in his intervention at the G20 Finance Ministers and Central Bank Governors meeting.
“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 added.