RBI Governor Shaktikanta Das said there are green shoots visible in the economyMumbai: After surprisingly holding the key lending rates, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Thursday that the central bank cannot "mechanically" keep cutting interest rates every time.
The remarks from the RBI chief came as the central bank kept the repo rate unchanged at 5.15 per cent while maintaining an "accommodative" stance.
The RBI however trimmed its economic growth forecast sharply to 5 per cent for the current financial year, from 6.1 per cent.He said the central bank will wait for the impact of the coordinated measures taken by the government and the RBI over the past few months to push growth to play out before taking a call on rates.The RBI's latest growth estimate for the year ending March 2020 stands a full 110 bps lower compared with 6.1 per cent in October, and 190 points from the estimate of 6.9 per cent in August.Official data last month showed growth fell to a more than six-year low of 4.5 per cent in the second quarter of current financial year.The sharp decline in growth had many analysts assuming that the RBI will deliver a rate cut on Thursday.Mr Das also pointed towards a line in the monetary policy committee resolution, which makes it "explicitly" clear that there is a scope for further rate cuts.He said there are green shoots in the economy, but it is too early to take a call on their sustainability.The recent measures initiated by the government will help in reviving sentiment and spur domestic demand, which is being blamed as prime reasons for the slowdown, he said.