Once again, the Reserve Bank may reduce the repo rate, the governor indicated

New delhi date. September 20, 2019, Friday

Reserve Bank Governor Shashikant Das said, "Given the slowdown in economic growth and stagnation in inflation, there is a possibility of further cuts in policy rates." The inflation rate is likely to remain below target for the next one year. The Reserve Bank has cut policy rates four times this year. However, the governor soon said that the fiscal is less likely to take measures to cope with the soft cycle to accelerate economic growth.

He suggested that the government should start the fixed budget at the earliest to deal with the slowdown. Since taking office in December, Das has cut policy rates four times in a row. All of them put 0.35% of the work into the staggering policy rates. In total 4 times the repo rate has been cut by 1.10%. That brings the repo rate down to a nine-year low of 5.40%.

"Prices have stabilized and inflation is below 4% and it is likely to remain at this level in the next 12 months," Bloomberg India Economic Summit said. Given the slowdown in economic growth, it is more likely to cut policy rates. I think the fiscal possibilities are very limited when it comes to dealing with the soft cycle to accelerate economic growth. The fiscal deficit is 3.3%. Looking at the debt of public sector companies this year is much less likely. But what is the government's position in terms of tax collection, how much will be spent on the actual situation, these are some of the things the government has to consider.

He called for reforms to protect the economy from the shock of rising global challenges. "This is a matter of concern," he said, referring to the drop in imports and exports. He hoped that the American Federal Reserve's policy rate cuts would accelerate the flow of funds into the country. But there is a need to be cautious about such capital flows. Given the low levels of subsidy, the Saeedi crisis will have only a decided effect on inflation and fiscal deficit. He also said on the recession that the global risk has increased but the Indian economy is in a strong state. One of the main reasons is that foreign debt is only 19.7% of the total debt. He said that there is no recession at the global level.