New Delhi: Amid growing concerns over growth of the economy, Reserve Bank of India (RBI) Governor Shaktikanta Das on Saturday asserted that the transmission of the rate cuts, announced last year, has been ‘steadily improving’ and is expected to improve further in the coming months.
“If you recall, in December MPC when we met, the transmission to fresh rupee loans was in the order of about 49 basis points. In this monetary policy, we have said that it has improved to 69 basis points and we expect the transmission of rate cuts to improve further,” said Das.
In 2019, the RBI had cut its policy rate by 135 basis points. In its last monetary policy review meeting held earlier this month, the Reserve Bank of India had maintained the status quo on the key policy rates citing growth-inflation dynamics.
On being asked if they are re-looking at the inflation target set in the Monetary Policy Framework, Das said that they are currently examining if there is a need to bring any change in the monetary policy framework and that, ‘if required, the central bank will talk to the government’.
“The monetary policy framework is in operation for the last three years. We are reviewing and analysing it internally as to how the MPC framework has worked. At an appropriate time, if required, we’ll have discussion with the government,” said the RBI governor.
“At the moment it (the framework) is under review within RBI,” he stated after a customary post-budget meeting of Central Board of Directors’ Reserve Bank of India (RBI).
The meeting was attended by Finance Minister Nirmala Sitharaman, RBI Governor Shaktikanta Das, MoS Finance Anurag Thakur, and others.