Inflation Drop Won't Dictate Rate Cuts: RBI Governor

With data showing a steep decline in price rise in June, Reserve Bank Governor Sanjay Malhotra on Friday said that the outlook on inflation and growth will determine future rate cuts, making it clear that the current data will not influence the trajectory.

- CORRESPONDENT

Speaking at the FE Modern BFSI Summit here, Malhotra also stated that the RBI's rate cuts will not lead to asset bubbles and added that the central bank has more ammunition in its arsenal beyond rate cuts to help the economy.

It can be noted that the RBI has cut its key rates by 1 percentage point this year, and official data pointing to headline inflation cooling to 2.1 per cent against the 4 per cent target has led to expectations of further easing.

"Rate cuts will depend on the outlook for both growth and inflation rather than the current numbers," Malhotra said.