Lower interest rates and excessive liquidity in system a matter of concern: Subbarao

Former Reserve Bank of India governor D Subbarao on Thursday said that low interest rates and excessive liquidity in the system are the biggest concerns today. He said this situation could affect financial stability.

Speaking at a conference here, Subbarao said the key challenge before central banks and the Reserve Bank of India today is to strike a balance between price stability, support to growth and employment.

Addressing the 12th Annual Union Bank Financial Conference organized by the Great Lakes Institute of Management, Subbarao said, “The Reserve Bank has maintained an exceptional policy during the last two years. Since the COVID-19 pandemic has affected the country, it is extremely important and the central bank is taking appropriate steps.