Reserve Bank of India Governor Shaktikanta Das has indicated that an interest rate reduction is unlikely in the near future, citing inflation still being above the target rate of 4 percent. In an interview with a leading business television channel, the Central Bank chief said discussing cut in policy rates at this stage would be premature.
Wholesale price-based inflation eased slightly in June but remained elevated at 12.4 percent. Data on retail or consumer price inflation for the previous month, which is due for release today, is also expected to hover around 5 percent according to forecasts. With inflation persistently overshooting the target, Governor Das stressed that the RBI’s focus remains on taming prices to support households and businesses.
On the growth front, he expressed confidence in the economy achieving the projected expansion of 7.2 percent for the current fiscal year. Factors like strong momentum seen in the last quarter along with expectations of a normal monsoon continue to support consumption in both urban and rural regions. The Governor also sees signs that stronger growth momentum could propel India towards 8 percent GDP growth over the medium term.
While acknowledging various risks on the global front, Das said the overall domestic economic environment remains positive. Key sectors like manufacturing and services are performing well, which bodes well for job creation. With inflation control as the priority for now, the RBI will stay vigilant on evolving price trends before signaling any shifts in its monetary stance.
