A day after announcing a 0.25% cut in Cash Reserve Ratio (CRR) to inject Rs. 17,000 crore into the banking system, Reserve Bank governor D Subbarao today met finance minister P Chidambaram and is believed to have discussed economic situation.
Asked when the RBI would be cutting interest rates, Subbarao told reporters, "You have to wait till October 30. I can't say on September 18, what we will do on October 30. I discussed some purely administrative issues with the finance minister. There was no discussion on policy".
The Reserve Bank, which has refrained from reducing interest rates in its mid-quarter review despite pressure from India Inc, is scheduled to unveil its second quarter monetary policy review on October 30.
Earlier in the day, Subbarao appeared before the Joint Parliamentary Committee (JPC) probing the 2G spectrum allocation in 2008. He was finance secretary at the time of award of 2G spectrum to the telecom companies.
The RBI in its policy review yesterday announced cut in cash reserve ratio (CRR) — the portion of deposits in banks are required to park with the central bank — by 0.25% to 4.5%. The decision will inject Rs. 17,000 crore of primary liquidity into the banking system.
Chidambaram had welcomed RBI's policy action, saying that the Central Bank took "a small but important step".