The policy action taken by the Reserve Bank of India is a prudently taken conscious decision. This is how Mr Ajai Kumar, Chairman and Managing Director of Corporation Bank, reacted to Monday’s policy stance.
“The RBI’s monetary policy action of keeping the policy rates and CRR unchanged is a very prudently taken conscious decision if one sees it against the persisting or rather increasing retail inflation,’’ he said.
The RBI has rightly left policy rates unchanged due to concerns about the emerging stagflationary conditions such as falling GDP growth with rising inflation, he said.
Rate reduction may result more in fuelling inflation and less in spurring growth, he added.