Reserve Bank of India [Get Quote] Governor D Subbarao on Tuesday said that unwinding of excess liquidity would need to be carefully calibrated once the economy recovered.

Comparing the RBI's steps with other central banks, Subbarao said the speed and scale of monetary response was more aggressive than many other countries.

"We will respond to the crisis as it unfolds," he said on the sidelines of the launch of RBI Deputy Governor Rakesh Mohan's book Monetary Policy in a Globalized Economy. "We are going to manage the borrowing in such a way that there is no disruption in the market," he told reporters.

The RBI has lowered the repo rate, the rate at which it lends to banks, from a peak of 9 per cent to 5.5 per cent in less than five months. This along with other measures like the reduction in the cash reserve ratio, the proportion of deposits that banks set aside with RBI, resulted in additional liquidity. The 400 basis-point reduction in CRR released Rs 1,60,000 crore into the system. The central bank has estimated the cumulative impact of measures initiated by it since October at over Rs 3,88,000 crore.

Subbarao, who moved to Mint Road at the peak of the global financial crisis, said there was still no clarity in the macro environment. "It's not that we don't have a contingency plan (to deal with financial crisis). We do and we have calibrated our response," he said.

Asked if the RBI was looking at private placement for the sale of government securities, he ruled out the option.

"We have the availability of different instruments. Market stabilisation scheme is one of the instruments, open market operations is another. So, they are being used as and when necessary," Rakesh Mohan said.

Subbarao ruled out that the government was privately placing gilts with the RBI.

The Fiscal Responsibility and Budget Management Act restricted the government from privately placing bonds with the central bank.