No Difference With Government on Monetary Policy Committee: Raghuram Rajan

The Reserve Bank of India (RBI) held its policy rate at 7.25 percent on Tuesday, pausing as widely expected after a spike in food prices sent consumer inflation to an eight-month high. RBI chief Raghuram Rajan is addressing a press conference.

• Fall in oil prices very beneficial for India
• RBI awaiting transmission of previous rate cuts
• Monitoring monsoon and inflation
• One set of bank licenses by this month's end
• RBI panel going through applicants
• No difference between RBI and the government over monetary policy committee
• RBI in a dialogue with the government on monetary policy committee
• RBI and government have reached a broad understanding on what the monetary policy committee should look like
• RBI wants monetary policy committee to be institutionalised; Ultimate responsibility on monetary policy is on governor
• RBI talking to government to hike foreign portfolio investment cap in debt market
• Sustained hardening of inflation excluding food and fuel "most worrisome"
• Credit availability seems to be adequate for most sectors
• Healthy respect between government and the central bank
• Veto power with RBI governor in proposed monetary policy panel will mean no change from current rate setting practice
• Institutionalising the process of setting interest rates is vital
• We are enthusiastic supporters of the idea of a committee for interest rates
• Government has given RBI a clear inflation objective
• Responsibility and decision of setting rates so far is that of RBI governor
• Studies show panel's decisions are better than those of an individual
• Spreading the responsibility can reduce external and internal pressure on an individual
• Any changes in RBI Act will require Parliamentary approval
• RBI ultimately decides what the course of action will be, but it seeks out what the government thinks