The Reserve Bank on Saturday set at rest speculation that the Centre was interfering in formulation of monetary policies, saying the relationship was "healthy" between the two.
RBI is an independent and autonomous body and consulted the government and other stakeholders while formulating monetary policies but did not necessarily follow what the government said, the apex bank's Governor D Subbarao told reporters in Mumbai.
"As a former civil servant, I know the RBI has consulted with the government but does not necessarily follow (what the government says)," Subbarao said adding "as a monetary policy institution, we (the RBI) consult the government and other stakeholders and that is the convention, no more, no less."
Terming the present difficult global situation as "high-profile with implications on so many things and making front-page news", Subbarao said, "these are extra-ordinary times and the government and RBI were grappling with the same challenges."
Both fiscal and monetary policies, even if formulated independently, have to be co-ordinated, he said.