Reserve Bank of India Governor Shaktikanta Das on Thursday said the central bank has many other instruments to address the sluggishness of the economy, not just interest rates.
His statement comes after the federal bank kept the benchmark interest rates unchanged in the second consecutive policy review. RBI’S Monetary Policy Committee (MPC) also pegged GDP growth for FY21 at 6 per cent, but guided towards an uncertain inflation outlook.
In a January 31 release, the National Statistical Office (NSO) had revised down real GDP growth for FY19 to 6.1 per cent from 6.8 per cent provided in the provisional estimates of May 2019. Given this, the central bank noted that the economy is still plagued by deep output gaps.
“The RBI has several instruments to address the sluggishness in the growth momentum,” Das told reporters at the customary post-policy conference.
The MPC kept the policy repo rate unchanged at 5.15 per cent, continuing with the accommodative stance to revive growth.
The governor said the continuity in policy from the last pause should not be read as a pointer to future actions. “While the decision is as per expectations, it is important not to discount RBI,” he said.
(With input from agencies)