Reserve Bank of India Raghuram Rajan on Friday said limping global growth coupled with uncertainty about US growth probably compelled US Fed to stay on hold. US Federal Reserve after a two-day meeting kept the key interest rates unchanged on Thrusday.
Rajan who has been under pressure from the government and corporates to cut rates said on Friday that his greatest task would be to keep inflation low not just now, but also in the future.
RBI governor Raghuram Rajan, however, said any move in India would have to consider long-term inflation implications. He further added that key for sustainable growth is low inflation not just today but also in future.
“(The) key task is to keep inflation low, not just today but well into the future,” he told a gathering of industrialists and bankers in Mumbai.
Inflation dived to a new low in August following falling commodity prices.
Below are the highlights from his speech
– With payments banks and small finance banks in, going forward all banking licensing to be on-tap
– Disappointed over use of Aadhaar being curbed; says it can help regulators contain over-borrowing
– Rajan welcomes government move to bring in bankruptcy code to tackle rising NPAs; says banks have to clean their books
– RBI encourages depth, not manipulation; streamlining all regulations, will have a master document by year-end
– India has to expand sustainable growth potential
– We would like to improve regulations in order to improve ease of business
– Businesses need to run on their own footing; India needs to foster competition and innovation
– Monetary Policy will accommodate to the extent until there is room. Meanwhile, RBI’s key task is to keep inflation low.
With agency inputs