High interest rates not impinging on economic growth: RBI Guv Das

Das on Growth: The Reserve Bank of India ( RBI ) Governor Shaktikanta Das said elevated interest rates have not adversely affected growth in the economy, saying that activity remains robust across most of the sector.

During his interaction with the media immediately after the RBI decided to maintain its policy rate at 6.5 per cent for the tenth time running, Das said: "At this stage, we don't see any evidence of higher interest rates impinging on growth. Growth continues to be very robust, and investment intentions are quite visible."

The recent RBI policy shift towards a 'neutral' stance heightens expectations for future rate cuts in its meetings. Das has, however, stated that, in his opinion, despite unabated high rates for around eighteen months, the economy was still holding up well. India recorded growth of 8.2 per cent last fiscal and is expected to do around 7.2 per cent in the current fiscal.

India's growth has also been at 6.7 per cent during the first quarter of this fiscal year. RBI 's August Policy Statement expects real GDP to grow at 7.2 per cent during the current fiscal year.

Das thus reacted to the relationship between deposit rates and the repo rate, saying that they would operate in tandem with changes in monetary policy. However, he added, "I can't say if the deposit rates have peaked; these are commercial decisions to be taken by the banks or NBFCs."

Going ahead, Das predicted that future policy rate decisions will be triggered by changes in the relationship between growth and inflation, thereby underlining RBI 's commitment to balance between economic stability and growth.