(Corrects to add attribution in first paragraph)
By Swati Bhat
MUMBAI (Reuters) – Restoring a balance between inflation and growth in India remains an important task for the Reserve Bank of India (NS:), the outgoing central bank governor, Shaktikanta Das, said.
“The inherent potential of the Indian economy to grow is very much there,” Das said, ahead of leaving office later on Tuesday.
A day earlier, India appointed career civil servant Sanjay Malhotra as the new central bank governor in a surprise move that has left markets guessing about the future direction of monetary policy.
Financial markets had expected Das to be handed an unprecedented second extension as his term ended on Tuesday.
Malhotra’s appointment at the RBI’s helm comes at a time when economic growth has slowed and inflation has risen.
GDP growth in the September quarter slowed to 5.4%, its weakest in seven quarters, and inflation rose to above the central bank’s 6% tolerance band in October for the first time in over a year.
At last week’s policy review, the central bank left interest rates unchanged, but reduced the cash reserve ratio that banks are required to hold in order to ease monetary conditions and support growth.
“I think growth is impacted by multiplicity of factors, not just one factor of the repo rate,” Das said.
“Our effort has been to follow and make monetary policy as appropriate as possible, keeping in mind the prevailing conditions and the overall outlook.”
(This story has been refiled to add attribution in paragraph 1)
