Price stability is low and stable (non-volatile) changes in the general price level, generally referred to as the inflation rate. History has shown that when inflation is low, it tends to be non-volatile. What is low inflation? The majority of the world tends to subscribe 2-3% pa. Why 2-3% pa and not 0% pa? The jury is out on this one, but present economic lore holds that 0% pa is too close to …
Private sector banks play a significant role in the financial system and the real economy. They intermediate between all sectors of the economy and other financial intermediaries and institutions, and some of them provide the payments system, which most of us use every day. Banks are innovative, largely a function of intense competition, and they are therefore at the forefront of new developmen…