Lauding the Reserve Bank of India’s role in bringing down inflation, chief economic adviser Arvind Subramanian said the central bank may further ease interest rates as improvement on the price front has opened the space for monetary easing.
RBI recently reduced it repo or key lending rate by 25 basis points to 7.75%. Repo is the rate at which RBI lends to banks.
“The way I view is that the RBI has a mandate to bring down inflation and keep it low and given the inflation has been coming down, that opened up the space for monetary policy easing and the RBI has begun that,” Subramanian said on the sidelines of the annual meeting of the World Economic Forum.
“The RBI’s own statement says that this is not just a change in rate, but a shift in its monetary policy stance provided inflation remains low and there could be more easing,” he added.