I do what I do: Rajan on cutting interest rate by 0.5%
Mumbai: “My name is Raghuram Rajan and I do what I do”, was RBI Governor’s response to comments that he was being Santa Claus in cutting interest rate by more than expected.
Amid government and industry pressure, Rajan today cut interest rate by 0.50 per cent, double of what was broadly anticipated and the biggest in more than three years. The cut brought down repo rate to 6.75 per cent, the lowest in four-and-half-years.
At the press conference called to announce the fourth bi-monthly monetary policy, he was asked if he was being Santa Claus in giving more than expected or should his statement be read as hawkish.
“I don’t know what you want to call me… Santa Claus…
you want to call me hawk, I don’t know. I don’t go by this.
My name is Raghuram Rajan and I do what I do,” he said.
Asked why RBI cut interest rate by 0.50 per cent, RBI Governor said: “We want to make sure that word sustainable and growth go together. Both are are important. And that’s why we used what room we had. But I don’t think we were excessively aggressive. We were not throwing out Diwali bonus.”
Rajan said the best protection against financial market turmoil and surviving turmoil is good policy.