“We are constantly monitoring the situation and we will act at the appropriate time. At the current juncture, we feel that appropriate time has not come,” Das told .
The RBI last slashed its repo rate — the rate at which it lends to commercial banks — in May 2020 and has maintained an accommodative monetary policy stance to help India get its economy back on track.
Estimate GDP growth for the current fiscal year at 9.5 percent and the Q1FY22 growth has been at 21 percent. The economic activity gained momentum in the first quarter and a revival of activity is being seen in various sectors.
Since last year, the central bank has introduced several dozen measures aimed at boosting growth and mitigating the impacts of Covid-19 on the economy.
Once the “revival of economic activity shows signs of durability, signs of sustainability, I think that should be an appropriate time for the Reserve Bank, or for the monetary policy, to think of, or perhaps consider a change in course,” he said in a pre-recorded interview on Thursday.
He added that the central bank will not announce any policy shifts without first preparing the markets. “All our actions will be calibrated, they will be well-timed, they will be cautious,” Das said. “We don’t want to give any sudden shock or any sudden surprises to the markets.”
India has no artificial restrictions that prevent the free flow of capital both ways. “It’s a process of convincing them and going forward we should see some traction,” Das said.