Will continue focus on taming inflation, resolving distressed projects
RBI Governor went against the views of four out of seven members in the TAC.
The RBI Governor said that turmoil in currency market has been long-coming and China is only the last step in it.
We need the market to clear the excess stock, says Reserve Bank Governor.
RBI Governor said NPAs are largely an accounting issue. “But beyond the accounting issue, there is a real issue that for a project under distress, how will you make sure that it’s put back on track.
According to the RBI Governor, the country today lacked economists with good grounding in price theory and general equilibrium analysis that are fundamental to economic policymaking.
Retail inflation has halved over the 19 months from double digit levels, giving the RBI scope to ease policy rates to help boost growth.
The Centre will also consult the RBI while selecting the external members on the committee.
Though RBI left the rates untouched, it was suggestive of a better growth prospect, looked to push banks for better transmission of rate cuts and also raised hopes of further rate cuts in future.
RBI misses an opportunity to cut rates. And risks a hardening of stance by the political establishment.
At its last policy review in June, the RBI had projected rising food prices could send consumer inflation to the top end of its 2 to 6 percent target range by January.
The draft financial code has rekindled the debate on who should have the ultimate responsibility for deciding the policy stance.
The meeting comes just days after the finance ministry released a revised draft of the Indian Financial Code that would reduce the central bank’s powers to decide the monetary policy stance.
While the RBI criticises policy, it does not use its own limited authority effectively.
The RBI, which has been under pressure to cut rates in order to boost investments and growth, is scheduled to announce the bi-monthly monetary policy on August 4.