there will be a calendar of auctions of government from the financial year beginning april 2002. role of primary dealers many countries have established a system of licensed primary dealers ( pds ) in government securities as important intermediaries to promote activity in government securities market. typically, pds are assigned specific responsibilities like minimum bidding requirements, giving two - way quotes, providing market information to the central bank, etc. in some cases, pds have been given exclusive right to primary auctions, or some special facilities in money market operations, open market operations, underwriting commission, etc. pds can play a vital role in the development of the secondary market. by being in the market, their prices discount all available information, they take up trading positions, and also render valuable assistance to the central bank by providing it with latest market information, designing new instruments, etc. since pds are generally highly leveraged, regulatory oversight over pds appears to be warranted and a common feature among central banks has been to periodically review the performance of pds and make the continuation of their operations performance - based. an interesting feature that merits notice is a rating of pds as established in poland. the institution of pds has been adopted in india in 1996 for developing both primary and secondary markets in government securities. the main objectives of promoting the institutional mechanism of pds are to strengthen institutional infrastructure in the government securities market in order to make it vibrant, liquid and broad based and to ensure development of underwriting and market making capabilities for government securities outside the rbi so that the latter could gradually shed these functions. in other words, the marketisation of government borrowings and vacation of rbi from primary market in an environment of large borrowing programme were facilitated by a conscious development of the institution of pds. pds obligations include giving annual bidding commitment, underwriting the primary issuance and offering two - way quotes. in return, the pds are extended liquidity support by the rbi and access to call money market as borrowers and lenders. incidentally, rbi experimented with a system of satellite dealers ( sds ) from 1996 to serve as a second tier to pds in the government securities market with the particular objective of promoting retail segment. however, on a review it was found to be not as useful as was expected and is being given up. gilt mutual funds mutual funds dedicated almost exclusively to investments in government securities called gilt mutual funds were established in india in april 1996. currently, there are 13

for banks and financial institutions. mitigation and green transition policies such as carbon pricing can also affect price stability, potentially precipitating large and long - lasting movements in relative 10 tree - based methods are flexible machine learning algorithms that can tackle a wide range of tasks. decision trees group individual data points by sequentially partitioning data into finer categories according to specific characteristics of interest. neural networks ’ main building blocks are artificial neurons, which take multiple input values and transform them in a non - linear way to output a single number – like logistic regressions. source : bis. ( 2024 ). artificial intelligence in central banking. prices and shifts in trend inflation. depreciation pressures on currencies of countries frequently affected by climate disasters can also cause financial instability, higher import costs and negative terms of trade. the range of policy options available to mitigate climate risks require dedicated research, especially in the context of the complex, non - linear ways in which climate, the real economy, financial systems and markets interact and affect each other. improved inter - disciplinary macroeconomic modelling is becoming crucial for understanding directions of causality and feedbacks. iii. globalisation and the natural rate of interest monetary policy making has evolved in line with structural changes in the economy and the financial system. inflation targeting ( it ) – the longest surviving modern monetary policy framework - is no exception. this could be attributed to the ‘ rule - based ’ principle built into the framework alongside elements of “ flexibility ” that have evolved in practice. it has been argued while the application of a core set of " scientific principles " has expanded significantly in practice, there remains, and will likely always remain, elements of art in the conduct of monetary policy 11. 11 mishkin, frederic s. ( 2007 ). will monetary policy become more of a science? nber working paper 13566, october. one principle followed by central banks in setting policy rates is the natural rate of interest – popularly known as r - star. it is a theoretical benchmark for monetary policy, reflecting the real interest rate that supports the economy at full employment while keeping inflation low and stable. this concept of r - star or the natural rate dates back to 189812 and currently forms an integral element of modern macroeconomic frameworks. it is argued in a seminal work that “ a central bank should seek to close the gaps between actual economic conditions and the economy ’ s potential for output and employment ( y - star and u - star, respectively )