Subbarao discussed India’s economic opportunities and challenges, noting that inflation in the 4-6 percent range is the short-term comfort range, down from the current 9 percent. He said that monetary policy is becoming the only line of defense and that Central banks do not have textbooks solutions. Subbarao also stated that communicating guidance is as important as the guidance itself, citing the US Fed as a good example.  Central bank policy must be stable, transparent and predictable, he reiterated, because uncertainty is not good for markets.

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