NEW DELHI: Reserve Bank Governor Shaktikanta Das on Friday said that this stage would have been “premature” and “very very risky” as the retail inflation is still high, and future monetary policy action would depend upon the income data and outlook.
Earlier this month, the RBI continued to maintain the status quo in the short-term lending interest rate (repo), citing inflationary concerns, though it changed the monetary policy stance to neutral.
The next bi-monthly monetary policy will be announced on December 6.
Participating at the India Credit Forum hosted by Bloomberg, Das said the September inflation was high and the next print too is expected to remain elevated before moderating.
“So therefore, rate cut at this stage will be very premature and can be very, very risky when your inflation is five and a half and next print is also expected to be high,” Das said.
Refusing to give any indications about rate cuts in future, the governor said the central bank would take action on the basis of the incoming data and outlook.
Das also said the Reserve Bank does not act like a policeman, but it maintains tight vigil on the financial market and takes regulatory action whenever necessary.
The remark came a day after the central bank directed Sachin Bansal’s Navi Finserv and three other NBFCs to cease and desist from sanctioning and disbursing loans effective from the close of business of October 21 on material supervisory concerns, including usurious pricing.
“No…we are not policemen. We are watching. We are watching very closely. We maintain vigil over the credit markets and…when it becomes necessary, we take action,” he said at the India Credit Forum.
Observing that this is India’s moment, Das said the country’s growth story is intact.