New Delhi: The central bank would hopefully continue its current easy monetary stance when it reviews its policy later this month as it was justified for the present economic scenario, the finance secretary said on Tuesday.
The Reserve Bank of India (RBI) is set to review its policy on 27 October. A ‘Reuters’ poll showed analysts expect no change in the interest rates.
No changes yet: Finance secretary Ashok Chawla. Ramesh Pathania / Mint
Asked what his expectations were from RBI, finance minister Pranab Mukherjee said: “It is not a question of expectations. Policy will have to be formulated.”
The RBI governor is scheduled to meet the Prime Minister and finance ministry officials on 23 October to review the economic situation ahead of the policy, officials said.
“We hope the current stance to continue...which is appropriate and justified,” finance secretary Ashok Chawla said in response to a question on whether he expected a change in RBI policy during the review.
In recent weeks, government officials including Prime Minister Manmohan Singh have outlined the need for continuing the present accommodative monetary stance for helping the economy recover faster.
RBI governor D. Subbarao has said there was broad agreement that India needs to retreat from its easy monetary stance, but he has also warned of the risks in mistiming such a move.
A faster industrial output growth and rising prices have boosted expectations the central bank may start tightening from early next year.
In a separate function on Tuesday, the Prime Minister said the economy could grow between 6% and 6.5% in the year to March, despite uncertainties over a durable global recovery.