RBI Governor Shaktikanta Das responds to Piyush Goyal’s rate-cut call

Shortly after Union minister Piyush Goyal suggested that the Reserve Bank of India (RBI) should cut interest rates despite food inflation, central bank governor Shaktikanta Das said he would "reserve" his comments for the upcoming monetary policy committee meeting in December.

The minister clarified that it was his personal view and not that of the government.

When asked about Goyal’s remarks, a smiling Das said, "The next Monetary Policy is coming up in the first week of December. I would like to reserve my comments for that. Thank you."

Talking about the global scenario, Das said that the challenge for central bankers has always been between "doing too little or too late on the one hand, and too much or too early on the other."

“During this entire period of great volatility, maintaining price and financial stability has posed difficult trade-offs as evident among others from the banking sector turmoil in certain advanced economies in early 2023. The challenge for central bankers has always been between doing too little too late on the one hand and too much or too early on the other.”

In October, the RBI kept the benchmark repo rate unchanged at 6.5% for the tenth consecutive time but changed the policy stance from "withdrawal of accommodation" to "neutral", which allows the central bank to adjust interest rates based on inflation trends.

The ministry attributed much of the inflationary trend to food prices. The Consumer Food Price Index (CFPI), which tracks food price inflation, rose to 10.87% in October, with rural and urban food inflation at 10.69% and 11.09%, respectively. While prices of pulses, eggs, sugar, and confectionery saw a decline, the inflation rate for vegetables, fruits, and oils and fats increased sharply, adding pressure on household budgets across the country.