Mumbai: Speaking on the continued market volatility from last week, Reserve Bank of India (RBI) Governor Raghuram Rajan on Monday said that relative to other countries, India is in a good position. "While I don't want to opine on future directions of markets, I would say, relative to other countries India is in a good position," said Rajan.
"Once market volatility settles down, India should emerge again as an investment destination of choice," he added. Rajan pointed that although consumer inflation has fallen sharply, inflation expectations among the public has gone up.
Interest rate cuts should only be delivered after sustained low inflation, and not as "goodies" doled out after public pleading, Reserve Bank of India Governor Raghuram Rajan said on Monday. "Rate cuts should not be seen as goodies that the RBI gives out stingily after much public pleading," Rajan said in a speech to a banking event.
"Instead, what is important is sustained low inflation," he added. "And rate cuts are a natural consequence that the RBI has no hesitancy in delivering." The comments come as corporate executives and Finance Minister Arun Jaitley is stepping up pressure on the RBI to cut rates as the economy struggles and price rises slow.
The RBI kept its policy rate on hold at 7.25 per cent, at its last policy review earlier this month, while leaving the door open to ease further depending on the inflation outlook and how swiftly banks lower their lending rates.
"Must help growth by reducing inflation as per glide path," he further said.
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