RBI more accommodative than many central banks in the world: Raghuram Rajan

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Underscoring the challenges for the central bank Rajan said, "I would say that let RBI do its job and they have a difficult job balancing slow growth and inflation is picking up."


Rajan explained that given the surplus liquidity in the system the overnight reverse repo rate which is the operating rate at which marginal cost of funds are priced is close to 3.25% and the inflation figure has reached 7% which implies a real interest rate being close to negative 4%. " That's as accommodative as you can get across the world. This is more accommodative than many central banks ".

"I do not want to opine on future RBI policy," Rajan said at an online panel discussion organised by the Centre for Financial Studies (CFS) of Bharatiya Vidya Bhavan’s SPJIMR ( S P Jain Institute of Managment and Research) “India’s Third Pillar – The Way Forward”, but I do want say it is already too accommodative"

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