MUMBAI: As the governor of Reserve Bank, in his first interaction with ‘outsiders’, Urjit Patel has downplayed the risk of inflation & harped on the focus on growth.
The shy central banker – who has refused the media and refrained from making any statement since taking over from his flamboyant precursor Raghuram Rajan on September 5 – exchanged his vision with half-a-dozen senior economists previous week.
Such customary chats in the past between the Reserve Bank governor & economists (or bankers) — often taking place weeks before a monetary policy announcement — rarely give a glimpse into the governor’s brain. Occasionally, such meets have even misled the visitors.
But Patel’s free-wheeling conversation, laced with humour and his personal visions on effective matters, has sent across a dovish signal to those who were invited.
According to the latest macro numbers issued by the govt, inflation is moving down while industrial production growth has slipped into negative territory (mainly due to items such as electrical machinery). “It’s unclear whether RBI & MPC would desire to wait for more data instead of cutting rates based on one month numbers. Also, present geopolitics would influence conclusion. However, monetary policy must be leading and a rate cut in October will be well received & improve sentiments,” said a bank economist who did not attend the meeting.