New Delhi: Soon to step down from the post of Governor of the Reserve Bank of India, Raghuram Rajan today stated that the central bank can never abandon inflation to focus on growth.
The outgoing chief, in his first public appearance since announcing he will not continue the second term, defended his record in fight against inflation, making a case for reforms in monetary policy he has championed.
Addressing his critics who blame him for high interest rates, he said "they cannot have it both ways, want lower inflation as well as lower policy rates."
"The fact that inflation is fairly close to the upper bound of our target zone today suggests we have not been overly hawkish and were wise to disregard advice in the past to cut more deeply," Rajan said.
"By focusing on low inflation, we are abandoning old ways that benefited the few at the expense of majority poor," he added.
In a justification for keeping his focus on inflation, Rajan said, "Investors have gained confidence in our monetary policy goals which will only improve as we meet our inflation goals."
Rajan seemed hopeful that the government along with the new RBI chief will internalise the set up frameworks and institutions and ensure low inflation in the future.
The RBI Governor also hailed the monetary policy committee as a revolutionary step for fighting inflation.
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