. the reserve bank used multiple instruments such as the liquidity adjustment facility ( laf ), open market operations ( omo ), cash reserve ratio ( crr ) and securities under the market stabilization scheme ( mss ) to augment the liquidity in the system. in a span of seven months between october 2008 and april 2009, there was unprecedented policy activism. for example : ( i ) the repo rate was reduced by 425 basis points to 4. 75 per cent, ( ii ) the reverse repo rate was reduced by 275 basis points to 3. 25 per cent, ( iii ) the crr was reduced by a cumulative 400 basis points to 5. 0 per cent, and ( iv ) the actual / potential provision of primary liquidity was of the order of rs. 5. 6 trillion ( 10. 5 per cent of gdp ). these measures were effective in ensuring speedy restoration of orderly conditions in the financial markets over a short time span. these measures were supported by fiscal stimulus packages during 2008 – 09 in the form of tax cuts, investment in infrastructure and increased expenditure on government consumption. the expansionary fiscal stance continues during 2009 – 10 to support aggregate demand. while the magnitude of the crisis was global in nature, the policy responses were adapted to domestic growth outlook, inflation conditions and financial stability considerations. until the emergence of global crisis, the indian economy passed through a phase of high growth driven by domestic demand : growing domestic investment financed mostly by domestic savings and sustained consumption demand. this overall improvement in macroeconomic performance in india could mainly be attributed to the sequential financial sector reforms that resulted in an efficient system of financial intermediation, albeit bankbased ; the rule - based fiscal policy that reduced the public sector ’ s drag on private savings ; and forward looking monetary policy that balanced the short - term trade - off between growth and inflation. iv. lessons from the crisis the crisis has shown that irrespective of the degree of globalisation of a country and the soundness of domestic policies, it can be impacted by a crisis in any other economy due to the interlinkages in the global economy. with the benefit of hindsight, a number of important issues have emerged which allows us to draw lessons. i will highlight four key lessons. first, the policy objectives of central banks would have to be broader than price stability as conventionally defined. the lesson for central banks that emerged from the crisis is that financial stability can be jeopardised even if there

, including as g20 sherpa and now as alternate to the finance minister in the board of governors of the fund. speaking on the sidelines of the fund - bank spring meeting in april this year, i had alluded to labels such as “ currency manipulation ” and called for greater understanding all around, to the compulsions of emerging market economies ( emes ) in building up their own buffers. i would like to point out that the origin of the phrase ‘ currency manipulation ’ itself is of recent vintage, dating to 2015, when the us treasury started publishing a semi - annual report on the subject. in this backdrop, it has acquired a predominantly bilateral connotation. currently, the semi - annual report judges countries as currency manipulators on the basis of three criteria : ( i ) a bilateral trade surplus with the us of at least us $ 20 billion ; ( ii ) a material current account surplus of at least 2 per cent of gdp ; and ( iii ) persistent one - sided net purchases in 6 out of 12 months adding to at least 2 per cent of an economy ’ s gdp over a 12 - month period. a country is put on the monitoring list even if two out of the three criteria are met. india was recently removed from that list after featuring in it from 2018. in the more recent period, the term has gained greater focus in the heat and dust of trade wars. 4. a question that crops up is why has labelling become a bilateral prerogative when a multilateral institutional architecture exists for the purpose? after all, article iv, section 3 ( a ) of the articles of agreement that established the fund, invests it with the oversight of the international monetary system. article iv, section 1 ( iii ) enjoins each member country to avoid manipulating exchange rates to gain unfair competitive advantage. article viii, section 3 obligates members and their 1 / 4 bis central bankers'speeches fiscal agents not to engage in discriminatory currency arrangements or multiple currency practices ( mcps ) unless they are approved by the fund or maintained under article xiv, section 2. 3. the application of the mcp concept has been reasonably considered, explained and applied by the fund with suitable changes carried out when needed. 5. after the collapse of the bretton woods system of fixed exchange rates and the eventual floating of currencies from 1973, the second amendment of the fund ’ s articles of agreement in 1978 made its mandate more explicit by fixing its