With inflation low and growth slipping, analysts will undoubtedly parse the new governor’s words to see whether a window for lower interest rates may open soon.
Some analysts are already predicting rate cuts in 2019. In light of the fall in inflation to 17-month lows, Rajeev Malik of River Valley Asset Management now sees a change in stance from the Monetary Policy Committee and predicts two rate cuts next year.
Government officials, in recent weeks, have also suggested that constrained credit flow is hurting the economy. The RBI has pushed back saying that at 15 percent, banking credit growth is strong. The government has also sought easier liquidity conditions to deal with the strains being faced by non-bank lenders. Everything within the ambit of the RBI will be looked at, Das said, suggesting that he will review matters with a fresh eye.
As Das prepared to leave the conference room on the 15th floor of the Reserve Bank of India building, a reporter shouted out a last and prickly question. Is Deputy Governor Viral Acharya still at the RBI?
Yes, I had tea with him a while back, Das said unfazed. Answering the question but making sure he gives nothing away.
