Here, in plain and simple words, is what the Reserve Bank of India’s (RBI) third quarter (Q3) review of monetary policy actually says:
The global economy is falling off a cliff. Markets have crashed. The list of things going wrong is getting longer and longer —we now have a chain of deleveraging, crashing asset values, falling incomes, contracting demand and rising unemployment. Observers have said this is the worst crisis since the Great Depression.
Emerging markets, too, have been hurt badly. In India, growth is being revised downwards. Exports are decelerating, industrial production is slowing, confidence is low, access to international credit has dried up and business sentiment is terrible. We have before us a long, weary and painful process of adjustment. Some say that the depressed conditions may continue for the whole of 2009. Things are really bad. Doom and gloom is in the air. The outlook is truly dismal. Ah, woe is me!
Under these unprecedented circumstances, other central banks are desperately trying new and innovative ways to tackle the crisis. But we at RBI have already done enough, thank you. We accordingly propose, in these trying times, to gear up to the challenge and do absolutely nothing at all.
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