Moderation in inflation makes room for rate cut: Arvind Mayaram

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Moderation in inflation makes room for rate cut: Arvind Mayaram
Economic Affairs Secretary Arvind Mayaram said that signs of moderation in inflation have strengthened the case for a cut in interest rates to boost economic growth, reported PTI.

"I don't think there is a case for rate hike at all at this point of time. If the RBI is comfortable at the manner at which the inflation is coming out, they may consider it (rate cut)...

"And I also believe that there is now a very strong case for incentivising growth...because we now need to move out of this trough, specially considering the fact that employment is also suffering, investments have been sluggish...," Mayaram said.

Wholesale inflation declined to a five-month low of 6.16 per cent in December, while the consumer price index (CPI) based inflation declined to three month low of 9.87 per cent. The data raised hopes that the RBI will lower interest rates in its third quarter monetary policy review on January 28.

Dion Global Solutions Ltd.

Story first published: Thursday, January 23, 2014, 9:10 [IST]
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