This version of the book Central Banking for Emerging Market Economies which first appeared in 2003 (Academic Foundation, New Delhi) is an update as also contextual. The global economic and financial crisis that emerged in 2007-08 and remains unresolved on a sustainable basis as of the third quarter of 2013, has led to questions about the relevance of central banks and in particular about the effectiveness of monetary policies in addressing the challenges. The integration of real and financial economies of the world has given a veneer of respectability to these questions. The crisis first engulfed the US and other advanced economies and subsequently impacted most emerging and develop-ing economies in different degrees.



This contextual update shows that central banks continue to be relevant and essential for sound functioning of economies. Central banks require to pursue traditional functions relating to currency and payment systems and to being banker to the government and to banks as vigorously as before the crisis. They also need to adopt an oriented approach towards the pursuit of monetary policy for growth, inflation control and financial stability. The orientation has to do with monetary governance in a broad sense, a point that is best echoed in the author’s companion book: Monetary Governance in Search of New Space (2012, Academic Foundation). Central banking in its essence continues to be the art of the possible.