MUMBAI, Oct 10: India’s central bank chief on Wednesday hailed visiting the US Federal Reserve chairman Ben Bernanke for resorting to “unconventional policies” to seek to pull the US economy out of recession.

The praise came during a closed-door meeting between Reserve Bank of India (RBI) governor Duvvuri Subbarao, Bernanke and the US Treasury Secretary Timothy Geithner in India’s commercial capital Mumbai. Subbarao welcomed Bernanke’s “unconventional policies” and demonstration of the “enormous range, depth and power of the central bank policy arsenal” to deal with the worst US downturn since the Great Depression in the 1930s.

“As a central bank, we empathise with the Fed’s concerns. The (economic) crisis has pushed central bank policy-making into uncharted territory,” Subbarao said in a speech released on the RBI website.

Geithner and Bernanke were on a two-day visit to Asia’s third-largest economy to forge closer diplomatic links with India as an ally in Asia, as well as to boost commercial ties and access for the US companies in the huge and largely untapped South Asian market.

“We had a very constructive first meeting. We discussed policy challenges facing both the US and India, and global challenges,” Bernanke, the first serving Fed chief to visit Indian’s central bank, told reporters.

“We also discussed monetary policy and banking regulations which are of mutual interest. India is becoming more and more a key player on the G20 stage,” Bernanke said, speaking at the bank headquarters.

The Indian central bank chief’s praise for Bernanke’s monetary policy came a day after Finance Minister P. Chidambaram voiced worry that the recent third round of quantitative easing — or QE3 — by the US could jack up commodity prices by infusing too much money into the global system.

However, Chidambaram also conceded that some of the money generated in the US could also come to India as much-needed investment.

“Bernanke explained the strategy for QE3 (quantitative easing),” said Rajiv Lall, vice-chairman of India’s infrastructure financier IDFC, who attended a business meeting with the central bank chief.

“(He) assured us the implications are not going to be as large as people fear,” Lall told the Press Trust of India agency. Geithner met industry leaders in Mumbai earlier on Wednesday, and discussed how trade between both countries could be deepened and opportunities expanded for business and labour.

In the capital New Delhi on Tuesday, Geithner welcomed a blitz of economic reforms in India which open the door wider to foreign firms, describing them as “obviously very promising” after meeting Finance Minister P. Chidambaram.

Bernanke, Geithner and the Indian central bank chief were set to meet up again at the IMF-World Bank meetings later this week.—AFP