mumbai reserve bank of india governor shaktikanta das said that the economy would have suffered had the central bank tightened monetary policy earlier than it did the governor said that indias monetary policy framework provides flexibility to ensure that economic resilience and financial stability with a clear objective that when situation stabilises inflation will be brought withina targetdas explained the rationale behind the central banks policy measures in his speech at a banking conclave organised by ficci and the indian banks association the speech comes a day ahead of the monetary policy committee meeting to discuss a communication to the government on why the inflation target of 4 could not be maintaineddas said that the rbi has eased policy as part of pandemic measures and announced measures to tighten monetary supply after the ukraine war started in april he said that while the inflation target was missed it was important to see what the alternative would have been it tightening earlier would have been very costly for the economy it would have been very costly for the citizens of this country we would have paid a high cost he saidthe governor said that while the rbi did not have the freedom to make public the contents of the letter to the government it would be a matter of time before the contents are disclosed as the mpc framework is built on transparencybank of england has been writing this letter every month for the last one year other central banks write similar letters however our mpc framework is quite recent and was instituted only in 2016said das the governor compared the inflation targeting exercise with the challenge faced by arjuna in the mahabharata when he had to shoot an arrow at the eye of a revolving fish by looking at its reflection in the waterno one can match the prowess of arjuna but our rbis constant effort is to keep an arjunas eye on inflation said das indicating that both required tasks required taking multiple factors into consideration before taking a decisionon the liquidity situation das said that it would ease as cash leakages from the system due to festivals would return and the government spending picks up on the exchange rate das said the rupee has seen a very orderly movement since the onset of the current geopolitical crisis we must deal with the global hurricane with confidence endurance and the courage of our conviction that we will weather this turmoil he added he said capital outflows that were being seen were a reflection of the liquidity in the indian marketsso far as india is concerned there is a very small amount of what may be called hot money we dont see that kind of money which flows in and flows out last fivesix months we witnessed certain outflows but they have moderated and people who pulled out their money did so because liquidity was becoming tight in those countries said dasthe terminal interest rate that the us fed is