India’s Macroeconomic Fundamentals Were Stable: Rajan
Reserve Bank of India Governor Raghuram Rajan shot down Niti Aayog chief Arvind Panagariya’s suggestion to raise the central bank’s inflation target, while pointing out that the country’s macroeconomic fundamentals were stable. He said the current global market turbulence may owe much to central banks persisting with stimulus programmes for too long. He termed India “a recovering economy”, despite weak global markets and two consecutive years of poor rain. “As these things turn, it (growth) will get stronger,” the RBI governor said.
Rajan slashed RBI’s policy rate by 1.25 percentage points in 2015 to push growth that had slowed to multiyear lows. Government and businesses have been seeking more rate cuts to stimulate the economy that has of late been showing signs of a pickup, but lacks the momentum to break out into full-fledged revival mode.