RBI Governor Raghuram Rajan said “more and, more” cash will be used for the people in India as the economy continues to grow.
The Reserve Bank of India governor also hinted at the Reserve Bank’s plans to introduce more cash into the system in the coming months.
Rajan said India would be able to spend the cash in a few months and the RBI would be ready to make an announcement soon.RBI Governor R. Narayanasamy said India is ready to spend cash for “many months” after the economy rebounds.
“There is a lot of cash available.
There are some problems, but we have enough cash,” Rajan told a press conference.”
We will spend it in a couple of months,” he said.
Rajans comments come a day after the Reserve bank’s monetary policy committee approved a proposal to lift interest rates by 2.5 per cent, which would help boost the economy and push inflation back down to 2 per cent.
This was a huge boost for the economy, but Rajans comments suggest that the economy may have to wait a little longer to be able see its own potential growth.
Inflation remains stubbornly high at 6.2 per cent and inflation expectations have been on a steep downward trend, although the central bank’s governor has made no indication yet that he intends to raise interest rates.
The Reserve bank has already lifted its benchmark interest rate twice in the past year.
It lowered its benchmark lending rate twice earlier this year.
