Good coordination with the government on political measures: Shaktikanta Das
MUMBAI: Governor of the Reserve Bank Shaktikanta Das on Thursday he said there are Okay coordination between fiscal and monetary policies so far, when addressing growth concerns and that the central bank is not worried about the lack of government fiscal deficit targets.
The governor also said that the central bank, however, would like to see more clarity about the impact on government countercyclical measures to boost growth, and stressed that the central bank is not worried about the government losing the deficit target. fiscal.
On the fiscal deficit that exceeded the objectives budgeted for October by 102 percent, the bureaucrat turned into a central banker explained that generally the fiscal gap it rises in the second and third trimesters and falls in the fourth trimester as the accumulation of income increases and it is suggested that you wait for the final numbers.
On growth, which has been lagging by a wide margin so far, said there are some green shoots that are emerging, but it will be too early to comment on their sustainability.
Das said inflation will increase in the short term, but is likely to moderate below the 4 percent target for the second quarter of fiscal year 21.
However, he warned that tariff increases of more than 40 percent of all telecommunications companies will have an adverse impact on core inflation , which so far has had a trend below 4 percent.
In a surprising move, the RBI kept the key policy rate unchanged at 5.15 percent, a minimum of nine years, but maintained the accommodative stance to support the economy.
The central bank also revised the estimate of GDP growth sharply down to 110 bp at 5 percent of its October policy, and increased the general inflation objectives.
The Monetary Policy Committee recognize that there are monetary policy space for future actions However, given the dynamic growth-inflation dynamics, the panel considered it appropriate to pause now, he said.
This is the first time in 2019 that the RBI has decided to pause, after having made cumulative cuts of 1.35 percent in five consecutive actions.