How RBI Governor responded to commerce minister's rate cut call
Union Commerce Minister Piyush Goyal urged the Reserve Bank of India to "definitely cut interest rates" while speaking at the CNBC-TV18 Global Leadership Summit on Thursday. He criticized the reliance on food inflation as a key factor in monetary policy decisions, calling it a "flawed theory." In response to Goyal's statement, RBI Governor Shaktikanta Das, who was also present at the event, humorously remarked that he would "reserve" his comments for the upcoming monetary policy meeting scheduled for December.
Das highlights central banking challenges and MPC's stance
During his keynote address at the summit, Das underscored the challenges central bankers are confronted with. He stressed on the fine line between "doing too little or too late on one hand, and too much and too early on the other." He also pointed out that the Monetary Policy Committee (MPC) had changed its stance to 'neutral' in October, allowing more room for rate decisions.
October's inflation surge and RBI's potential response
October saw India's inflation cross the 6% mark prescribed by the RBI, hitting a 14-month high of 6.2%. This has fueled speculation that the RBI may keep rates unchanged for a record 11th time at its December meeting. October's annual retail inflation rate breached the central bank's tolerance band for the first time in over a year, mainly due to rising vegetable prices. India's wholesale inflation also rose to a four-month high of 2.4% in October, up from September's 1.84%.
