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RBI acted ahead of time by cutting rates from Feb: Das
RBI Governor Shaktikanta Das on Monday said the central bank saw economic growth slowdown in February, prompting it to cut rates ahead of the curve and wondered why markets were surprised with the decision to pause rate reduction.
Noting that there is a need for an “informed and objective discussion” on the country’s economy, Das said the RBI would do “whatever is necessary” to address growth slowdown, spikes in inflation as well to ensure good health of banks and non-bank lenders.
The RBI chief hoped the US-China truce on trade tariffs, announced over the weekend, would last as he pitched for coordinated efforts to push global growth like those after the 2008 financial crisis.
The apex bank went for five consecutive rate cuts starting in February this year, making it a cumulative reduction of 1.35 per cent.
“Both the government and RBI have acted in time... we have acted a little bit ahead of time in terms of reducing our policy rates. As early as February this year, the RBI saw that there was a growth slowdown, we saw that a momentum for slowdown was building up, so started cutting rates this year,” he said.
Speaking at an event here, Das said in February, the market was surprised with the RBI’s call to cut rates and wondered why are market participants surprised now also with the pause call.
“In the last Monetary Policy Committee (MPC) meeting when we took a pause, I don’t know why the market was surprised. (In) February, I was told that the markets were surprised, but subsequently I am happy and thank all of you for accepting that it was a right call to take.