In current times, monetary & fiscal policies cannot be a 'question of either or', says Das

Mumbai: Defending the long pause in interest rate hike and the continuing accommodative stance, Reserve Bank of India Governor Shaktikanta Das on Thursday said in current times, "monetary and fiscal policies cannot be a question of either or, but must go in tandem with each other".

For the 10th time in a row, RBI's Monetary Policy Committee (MPC) on Thursday left the key rates unchanged -- the repo at 4 per cent and the reverse repo at 3.35 per cent -- and decided to continue with the accommodative policy stance.

Underlining that growth is uneven and needs to be nursed some more, Das said that "monetary and fiscal policies cannot be a question of either or, but must go in tandem with each other, especially in times like what we are going through the past two years."

To a query on whether the central bank has fallen behind the curve of its peers, Das said, "we are very clear of our stance and our assessment is very much in sync with our evolving domestic situation which is very different from those central banks which have abandoned loose money policies.

"Our assessment and the resultant policy move are fully-geared by the evolving domestic inflation and growth scenarios".

Many central banks across the world are moving towards a hawkish monetary policy approach amid rising inflation.

Noting that maintaining price stability is "upper most in our mind", Das said that at the same time, it was mindful of the need to continue to support growth so as to make it more even and sustainable. "That means in our view, we aren't behind any curve as our domestic factors are different", Das said.

Das said that growth momentum is definitely positive. "At least I see a target for fiscal consolidation by FY25, at least going by the Budget speech. So, they are on a road map and so is RBI. We are on a well-coordinated action plan on our respective targets. Definitely the fiscal part has a larger role to play but we also have to understand that RBI also has a key role to play in this,"

Das said.

Meanwhile, days after the government said the Reserve Bank will introduce a digital currency in 2022-23, Governor Shaktikanta Das on Thursday said the central bank does not want to rush and is carefully examining all aspects before introduction of the

Central Bank Digital Currency (CBDC).

He, however, declined to give any timeline for the launch of the CBDC.