RBI monetary policy: Governor Shaktikanta Das says central bank has many other tools to revive growth, not just interest rates

Mumbai: After leaving benchmark interest rates rates unchanged in the second consecutive policy review, RBI governor Shaktikanta Das on Thursday said the central bank has many other instruments to address the sluggishness the economy, not just interest rates. The Reserve Bank of India (RBI) in its sixth bi-monthly monetary policy pegged GDP growth for FY21 at 6 percent, but guided towards an uncertain inflation outlook.

Will remain vigilant against potential generalisation of inflation, @DasShaktikanta, governor of @RBI says in his #RBIPolicy pic.twitter.com/3EzLDGY3pu

— CNBC-TV18 (@CNBCTV18Live) February 6, 2020

In a 31 January release, the National Statistical Office (NSO) had revised down real GDP growth for FY19 to 6.1 percent from 6.8 percent 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 monetary policy committee (MPC) kept the policy repo rate unchanged at 5.15 percent, continuing with the accommodative stance to revive growth. The governor said the continuity in policy from 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.