RBI chief says policy rate is appropriately set
MUMBAI (Reuters) - India's policy interest rate is appropriately set, said RBI Governor Raghuram Rajan, who has raised rates three times by a combined 75 basis points since September despite economic growth at a decade low.
"Rather than administer shock therapy to a weak economy, the RBI prefers to disinflate over time rather than abruptly, while being prepared to do what is necessary if the economy deviates from the projected inflation path," Rajan said in a speech on Wednesday.
Rajan warned against waiting to act until inflation expectations become entrenched, but also said the Reserve Bank of India would overlook temporary spikes in inflation.
"In other words, the monetary policy committee will not put on blinkers and see just the inflation number," he said.
(Reporting by Suvashree Dey Choudhury and Swati Bhat; Editing by Tony Munroe)
- Tweet this
- Share this
- Digg this
- Wall St Week Ahead - Fed change unlikely to blunt equities' appeal over bonds
- UPDATE 3-Heineken confirms, rebuffs SABMiller bid
- Islamic State executes eight Sunnis in northern Iraq
- NATO countries have begun arms deliveries to Ukraine - defence minister
- British queen urges Scots to 'think carefully' on independence vote
Xi's South Asia Visit
China will pledge to invest billions of dollars in India's rail network during a visit by President Xi Jinping this week, bringing more than diplomatic nicety to the neighbours' first summit since Narendra Modi became prime minister in May. Full Article | Video