currency debt segment, were substantial. this prompted the reserve bank to resort to somewhat unconventional monetary policy measures besides drawing down of foreign exchange reserves to meet the immediate shortfall. let me give you the essence of the key measures. in terms of monetary policy, the upper bound of the policy rate corridor ( i. e., msf rate ) was raised by 200 basis points and the quantity of central bank liquidity available through the laf window was restrained. this had the desired effect of tightening the monetary conditions and raising the effective policy rate sharply to the msf rate. in order to signal that the above measure is temporary so that the interest rates at the longer end do not harden, a form of operation twist was tried by conducting outright omo purchase of government securities alongside sale of short - term government cash management bills. this inverted the yield curve, though accompanied by some increase in long - term rates. with a view to containing the current account deficit ( cad ) on the balance of payments ( bop ), gold imports were restricted. the non - resident deposit schemes and domestic banks ’ borrowing abroad were further liberalised with incentives for swapping these inflows directly with the reserve bank. this substantially augmented foreign exchange reserves despite some outflow on account of directly meeting the foreign exchange requirement of oil imports. as portfolio capital outflows waned and bop improved, stability returned to the foreign exchange market. this prompted the reserve bank to unwind the bulk of the exceptional measures and normalise monetary policy by restoring the policy interest rate corridor to its original configuration and the repo rate to its signaling role of policy. mss securities are essentially short - term government securities, introduced in april 2004, as an instrument of sterilisation to partly neutralise the expansionary effects of surges in capital inflows. the amount sterilised through mss remained immobilised in the central government ’ s account with the reserve bank of india. as at end - september 2008, mss amount stood over 1. 7 trillion. bis central bankers ’ speeches conclusion let me conclude. excess global liquidity emanating from accommodative monetary policy stance in advanced economies has raised asset prices and imparted greater volatility to capital flows to emes. in episodes of liquidity stress, capital account and exchange rate management seem to override the domestic monetary policy objectives of growth - inflation considerations. as aptly observed by helene rey ( 2013 ), “ independent monetary policies are

shaktikanta das : statement statement by mr shaktikanta das, governor of the reserve bank of india, 5 may 2021. * * * as the financial year 2020 – 21 – the year of the pandemic – was drawing to a close, the indian economy was advantageously poised, relative to peers. india was at the foothills of a strong recovery, having regained positive growth, but more importantly, having flattened the infections curve. in a few weeks since then, the situation has altered drastically. today, india is fighting a ferocious rise in infections and mortalities. new mutant strains have emerged, causing severe strains on healthcare and medical facilities, vaccine supplies and frontline health personnel. the fresh crisis is still unfolding. india has mounted a valiant defence, domestically and globally, to ramp up vaccines and medical support, and save lives. 2. simultaneously, shoring up livelihoods and restoring normalcy in access to workplaces, education and incomes becomes an imperative. as in the recent past, the reserve bank of india ( rbi ) will continue to monitor the emerging situation and deploy all resources and instruments at its command in the service of the nation, especially for our citizens, business entities and institutions beleaguered by the second wave. the devastating speed with which the virus affects different regions of the country has to be matched by swift - footed and wide - ranging actions that are calibrated, sequenced and well - timed so as reach out to various sections of society and business, right down to the smallest and the most vulnerable. while doing so, our admiration and gratitude goes out to the brave citizens of our nation, to our doctors, healthcare and medical staff, police and law enforcement agencies and to other authorities who battle the second surge selflessly and tirelessly and have been at the frontline for more than a year. their services to our nation are needed now, more than ever. the quarantine facilities of the rbi continue to operate with more than 250 rbi personnel and service providers – away from their homes – to ensure continuity of various segments of financial markets and rbi operations. 3. since the pandemic began, i have on several occasions expressed my genuine faith in india ’ s resilience and capacity to overcome all odds. to quote mahatma gandhi – “ my faith is brightest in the midst of impenetrable darkness1. ” over a year now, we have struggled to free ourselves from the pandemic ’ s deadly grip. between