RBI governor Rajan hints at year’s fourth interest rate cut
WASHINGTON: Hinting at the fourth interest rate cut this year, Reserve Bank of India governor Raghuram Rajan has said he is not done with lowering rates and the central problem for the entire world remains slowing economic growth.
Rajan, participating in the elite Jackson Hole economic symposium of the Kansas City Federal Reserve, said on Friday the RBI had reached an agreement with the government on a new rate- setting panel, the Monetary Policy Committee, which would be announced soon.
The RBI left interest rates unchanged at its last policy review on August 4, having already cut them by 75 basis points this year as a slump in global commodity prices brought inflation under control. By holding rates steady, Rajan went against the majority on an advisory panel, who had recommended a reduction.
Rajan said on Friday the central bank was still in “accommodative mode” and would take a decision as per the data on inflation and other macroeconomic factors.
“We also have i nflation which other people do not have. We have cut the interest rate thrice so far this year and we are still in accommodative mode. We will have a look at data as it comes in and take a view accordingly,” he said. “We have not said we are finished ( on cutting rates) and we will take a view as the data allows us to do,” Rajan told CNBC in an interview on the sidelines of the Jackson Hole summit.
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We have not said we are finished [on cutting interest rates] and we will take a view as the data allows us to do.
RAGHURAM RAJAN, RBI guv to CNBC