Bernanke defends US monetary expansionism

US Federal Reserve Chairman Ben S Bernanke today defended the expansionist monetary policy of the US Federal Reserve, saying it will not have any great implications for its trade partners.

Bernanke was reacting to Indian business leaders' queries on the recent decision of the Fed to inject a third round of liquidity (QE3) and its economic implications for both the US and its trading partners.

Bernanke and US treasury secretary Timothy Geithner are in India to participate in the third annual US-India Economic and Financial Partnership Meeting. This is the first time a serving US Fed chief is visiting India.

"We got briefed by both (Bernanke and Geithner) on the US economic situation. We briefed them on India and said we were very confident now that the reform process is taking place," Godrej group chairman and chairman of industry body CII Adi Godrej said after the breakfast meet.

"He (Bernanke) explained what the strategy for QE3 is and assured us that the implications are not going to be as large as people fear," Rajiv Lall, vice chairman and managing director of infra sector financing company IDFC, said.

"I think their outlook is very positive. Of course, everybody recognises that much more needs to be done as well. But I think their initial reaction is very positive," Chanda Kochchar, managing director and CEO of the country's largest private sector lender ICICI Bank, said.