RBI following the US Fed? Guv Das says "we play according to local weather, pitch conditions"
Reserve Bank of India (RBI) follows the US Federal Reserve System, the governor has emphasized on the central bank's independence from global influences.
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He likened the monetary policy's stance to a cricket match while underscoring the RBI's commitment to prioritising domestic economic conditions over what's happening on a distant horizon.
«There is a view that in matters of monetary policy, the Reserve Bank is guided by the principle of ‘follow the Fed’. I would like to unambiguously state that while we do keep a watch on whether clouds are building up or clearing out in the distant horizon, we play the game according to the local weather and pitch conditions,» said Das.
He went to explain that while the apex bank does consider the impact of monetary policy in advanced economies on Indian markets, its actions are primarily determined by domestic growth-inflation conditions and the outlook.
It is to be noted that India has not changed it stance of 'withdrawal of accommodation' since February 2023 and has maintained status quo 7 times in a row.
As for the Fed, its officials, over the last few months have made clear they are in no hurry to cut the policy rate.
Moreover, according to a majority of forecasters in a Reuters poll, the US Fed will cut its key interest rate in September and once more this year.
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