Stating that he has enjoyed every minute of his job as RBI governor, Raghuram Rajan after his last monetary policy review said, “It has been a fantastic experience for me. I have enjoyed every minute of it. That is partly because every day when I sat and worked with my colleagues, and everyday when we went home, we had the satisfaction that we have managed to move the needle forward a little bit.” “There are very few places where you feel that way. Which is why it was a fantastic job,” he added. Asked about the criticism that comes his way, Rajan said, “Critics are there are all the time, but then there are also people who send me anonymous messages in planes thanking me for the work that I have done.” “The important thing is if you think you have made a useful contribution,” he added.
In his last monetary policy review, Raghuram Rajan kept key policy rates unchanged. While repo rate was maintained at 6.5%, CRR was kept at 4%. Even though he emphasised that the monetary policy stance remains accomodative, Rajan flagged fears on inflation. “Risks to the inflation target of 5 per cent for March 2017 continue to be on the upside. Furthermore, while the direct statistical effect of house rent allowances under the 7th CPC’s award may be looked through, its impact on inflation expectations will have to be carefully monitored so as to pre-empt a generalisation of inflation pressures. In terms of immediate outcomes, much will depend on the benign effects of the monsoon on food prices,” he said.
Also read: What prevented Raghuram Rajan from cutting rates in his last review?
“In view of this configuration of risks, it is appropriate for the Reserve Bank to keep the policy repo rate unchanged at this juncture, while awaiting space for policy action. The stance of monetary policy remains accommodative and will continue to emphasise the adequate provision of liquidity.” “Easy liquidity conditions are already prompting banks to modestly transmit past policy rate cuts through their MCLRs and pro-active liquidity management should facilitate more pass-through,” he said.