LATEST NEWS – Faster remonetisation and return of discretionary consumer demand will push economic activity in the latter part of the financial year, opined RBI Governor Urjit Patel while voting for no cut in interest rate earlier this month.
Patel, during the two-day Monetary Policy Committee meeting on February 7-8, also said that shifting monetary policy stance from accommodative to neutral will provide sufficient flexibility to move the policy rate in either direction.
“With the remonetisation of the economy taking place at an accelerated pace over the last two months, economic activity is expected to pick up from the latter part of Q4 of 2016-17.
“Discretionary consumer demand, which got impacted in the immediate aftermath of demonetisation, is expected to bounce back,” Patel said according to the Minutes of the meeting of the all powerful MPC released by the Reserve Bank.
All the six members of the Committee had voted in favour of the “resolution to keep the policy repo rate unchanged at 6.25 per cent”.
Patel further said that limited data available on the corporate sector performance in the third quarter suggests that sales growth may have improved relative to the previous quarter. READ MORE