##fold in a manner which will prove that the mpc ’ s decision was right. but that is not the point i am trying to make and only time will tell how the situation evolves. when we took the pause, the mpc very clearly recognised that monetary space is available, and it will use this space as per requirement, keeping in mind the incoming data regarding inflation and growth. this can be construed as an example of forward guidance wherein the reasons for the pause have been very elaborately explained in the mpc resolution and in the statement which i made during the press conference. it is available on the rbi website. in our decision to take a pause, while we have said that there is space for further monetary policy action, we have very carefully and very definitively also said that the timing will have to be decided in a manner that its impact is optimum and maximised. 33. we have, in fact, in other policy measures also, tried to bring about a lot of transparency, showing our focus on communication. to explain the power of communication, let me mention the 2008 global financial crisis and the expansionary policy that the us fed adopted at that time. the communication at that time was very powerful ; therefore, it was accepted by the international markets and the analysts. everybody understood exactly what the fed was going to do. in 2013, during the so - called taper tantrum, the us fed ’ s communication was not as powerful – a mere mention that they are perhaps going to roll back or unwind the expansionary policy – created a huge havoc and volatility in the international financial markets. communication, therefore, is a powerful tool. any decision that is taken by the central bank has to be backed by communication. of course, communication should be backed by action and it should never be empty words. 6 / 7 bis central bankers'speeches conclusion 34. let me conclude by saying that in a complex and interconnected economy such as india, challenges emanate from the spheres of monetary policy, regulation and supervision of financial markets as well as detection of frauds, risk management functions and internal control systems of banks and non - banks, amongst others. 35. consequently, there is never a dull moment in the central bank. it is always full of challenges ; what is important is that we should respond to these in time. recently, an old timer in mumbai told me that you have winds blowing from two different directions in the top floors of the reserve

countries should not overtake or should not stifle the recovery process. for example, even though quarterly growth ( annualised ) in the euro area ( ea ) has been stable in the last two quarters – it was 0. 8 per cent in q2 and q3 of this year – it is not what the ea would like to have. we find that there is space for fiscal policy action in many of the larger european economies, but we are yet to see any traction on that front. these countries may have their own reasons for holding back fiscal action, but as an outsider and after my interaction with central bank governors of other major economies, it is felt that fiscal action in europe is somewhat delayed and we are yet to see the kind of fiscal action that we saw in 2008. in fact, it is noteworthy that the new chief of european central bank, ms. christine lagarde, has stressed the need for some amount of fiscal expansion by countries in the ea which can afford to do so. 16. talking about the world growth scenario, we find that there are some marginal signs of pickup in the us economy, with growth in q3 being 2. 1 per cent in comparison to 2. 0 per cent in q2 of 2019. the uk, which recorded a surprising growth of – 0. 8 per cent in q2, has reported a 1. 2 per cent annualised growth in q3. growth in china has decelerated. south africa has witnessed a decline in growth from 3. 2 per cent in q2 to – 0. 6 per cent in q3. brazil has shown some marginal improvement. the overall picture, however, remains unclear. 17. fortunately, for india, both government and the reserve bank have acted in time. with regard to the rbi, i can say that the markets were somewhat surprised by rbi ’ s action a little ahead of time, in terms of reduction in policy rate as early as in february 2019, when we anticipated that a momentum for a slowdown is building up. the government, on its part, has also announced several policy measures in the last five to six months. 18. i would like to conclude this part of my intervention by saying that a synchronised slowdown across countries necessitates coordinated policy action by major economies. domestic economic growth 19. coming to domestic economy, it is imperative that we recognise and highlight the growth drivers of the past and the present. what led the indian growth story in