RBI Governor Urjit Patel said the monetary policy decisions need to be ‘forward-looking’ and cannot be taken on the basis of day-to-day inflation rates.
Speaking to reporters after Finance Minister Arun Jaitley’s customary post-Budget address to RBI’s board, the governor talked about improving credit growth.
On the monetary policy framework, Patel said that the Monetary Policy Committee (MPC), which earlier decided to keep the key rates fixed earlier this week, has explained its reasons for the decisions it takes as per the policy framework. “We have to be forward-looking when conducting monetary policy rather than looking at inflation rates today or yesterday”, he said.
Referring to his meeting with Sebi’s board in the morning, Jaitley said, “One of the factors that stood out in the market regulator’s presentation was that there is now an increased reliance on the bond market as far as credit is concerned.” He further added , “So we will have a better equity-debt ratio (for corporates) given that the entities have been able to raise a fair bit of equity. I think that… We are already at the credit growth of 11 percent or so.”