FM Sitharaman says RBI to take a call on interest rates keeping growth in mind

Finance Minister Nirmala Sitharaman talking to Rahul Joshi, Editor-in-Chief, Network18, on February 2.

Finance Minister Nirmala Sitharaman has said the Reserve Bank of India (RBI) will take a call on the course of interest rates, keeping the challenges of economic growth in mind.

"I think RBI takes a call keeping growth in mind," the minister said in an exclusive interview to Rahul Joshi, Editor-in-Chief, Network18, a day after presenting the interim budget. Sitharaman said the RBI has been steady in its policy approach keeping growth in mind.

The government would appreciate for the RBI to work with stakeholders while charting the course of interest rates. "I am sure RBI takes a call keeping growth in mind. They have been steady I suppose. They will continue to be steady is my expectation and hope," Sitharaman said.

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The FM's comments on interest rates come just few days ahead of the bi-monthly policy review of the monetary policy committee (MPC) scheduled next week.

The RBI-led MPC has been fighting a tough battle against high inflation in the last few years.

The MPC hiked the key interest rate, repo, by about 250 basis points in the last rate hike cycle to combat the price rise.

One bps is one hundredth of a percentage point.

After bringing down the retail inflation to the 2-6 percent band, the central bank  is now striving to achieve the medium-term target of 4 percent.