RBI Monetary Policy Key Takeaways: Rates Unchanged, GDP Forecast Raised, Inflation A Concern

Reaching 4% (inflation) can’t be an one-off event, said RBI Shaktikanta Das, adding that MPC should have confidence that the level is durable.

Deputy Governor Michael Patra said that while GDP is at its potential, inflation is way above target.

We have to withdraw accommodation further to bring back inflation to target, he said.

The 7% GDP growth estimate presented by in the monetary policy statement is conservative, said RBI Deputy Michael Patra, on grounds that October, November economic data is looking very robust.

Governor Shaktikanta Das said that there are signs of rural demand turning around, government capex remains very strong and there are signs of revival in private capex.

Private investments are expected to pick up seeing capacity utilisation, Das said.

Confirming that savings bank interest rates haven’t seen much rise, RBI Governor Das said that and RBI will not intervene in the matter.

Interest rates are deregulated and it is a commercial decision by banks, Das said, adding that administered rates would be a retrograde step.

RBI Governor Shaktikanta Das said the central bank refrains from giving forward guidance because of uncertainty in response to a question on prospect of policy rate cuts.

The future looks fickle and new shocks can hit any economy, anytime, he said.

Inflation is still away from 4% and it is not possible in current situation to give forward guidance.

RBI Deputy Governor Swaminathan J said composition of lending in the under Rs 50,000 segment is less than half a percent of total outstandings, and as such doesn’t pose a risk.

Lending without clear end use will get curtailed, he said.