The duo examined the possibility of nudging banks to lower interest rates in order to bring down the cost of funds for the economy. Jalan had thought that he would be able to "talk down" interest rates in the absence of quantitative signals to this effect in the credit policy. Banks have refused to lower rates so far.

Experts had opined that there would, in fact, be upward pressures on interest rates in the light of balooning government borrowings and higher credit demand from the non-food sector in a scenario where deposit growth would be less than enthusiastic for the rest of the year.

The finance secretary also mooted the requirement of steps to curb exchange rate volatility that might occur because of looming uncertainity on the political front. Exchange rates had remained reasonably stable despite the fall of the Vajpayee government but Kelkar reportedlytold Jalan to be prepared with its respository of measures to crub sharp fluctuations as and when they occured.