Piyush Goyal
Piyush Goyal says RBI should definitely cut interest rates; central bank's governor responds
New Delhi/IBNS: Union Commerce Minister Piyush Goyal advocated for an interest rate cut by the Reserve Bank of India (RBI) on Thursday (Nov. 14), emphasizing that food inflation should not be a determining factor in rate decisions.
He projected a decline in inflation by December, stating, “Under the Modi government, inflation has been at its lowest since India’s independence.”
Addressing the recent Foreign Institutional Investor (FII) outflows, Goyal encouraged investors to adopt a long-term perspective instead of focusing on short-term fluctuations.
India’s retail inflation hit a 14-month peak in October, primarily due to surging vegetable prices, with annual inflation reaching 6.21 percent.
Food inflation, which makes up almost half of the consumer price index, rose sharply to 10.87 percent in October from 9.24 percent in September.
Responding to Piyush Goyal's call for cutting interest rates, RBI governor said he will reserve his comments for December MPC. File photo by Ministry of Information & Broadcasting via Wikimedia Commons
In his keynote speech, the RBI governor highlighted the delicate balance central bankers face between "acting too late or too little on one side, and doing too much or too soon on the other."
Das noted that in October, the Monetary Policy Committee (MPC) shifted its stance to 'neutral,' allowing the RBI greater flexibility to consider a rate cut.
When asked about Commerce Minister Piyush Goyal's suggestion for a rate cut, Das responded with a smile, saying, “The next Monetary Policy meeting is in the first week of December, and I’ll hold off on commenting until then.”
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