Reserve Bank of India (RBI) Governor Shaktikanta Das has reacted to the decision not to cut the repo rate. He said a repo rate cut at this time would have been untimely and very risky as retail inflation is still at high levels. Along with this, Das said that future monetary policy steps will depend on the upcoming data and economic outlook.
What did Das say on inflation?
Shaktikanta Das said retail inflation for September is at a high level and the upcoming data is also expected to remain high before softening. The RBI Governor said that when your inflation is five and a half percent and the next figure is also expected to be at a higher level, then cutting interest rates at this time would be very untimely and could also be very risky. He refused to give any indication regarding future interest rate cuts and said that the central bank will take steps based on the upcoming data and outlook.
No change in repo rate
Let us tell you that in the meeting of the Monetary Policy Committee (MPC) of RBI held earlier this month, it was decided to maintain the repo rate. However, RBI revised the monetary policy stance to ‘neutral’. Now the next bi-monthly monetary policy will be announced on December 6.
don’t act like a policeman
Shaktikanta Das also said that the central bank does not act like a policeman, rather it keeps a close watch on the financial market and takes regulatory steps when necessary. His comments come a day after regulatory action was taken against Navi Finserv and three other non-banking finance companies (NBFCs) on Thursday.
Let us inform you that RBI has ordered Sachin Bansal led Navi Finserv and three other NBFCs to stop approving and disbursing loans from the close of business on October 21. The move has been taken due to supervisory concerns including excessive pricing.
