Hinting at the fourth interest rate cut this year, RBI Governor Raghuram Rajan has said he is not done with lowering rates and the central problem for the entire world remains slowing economic growth. Rajan, who was participating in the elite Jackson Hole economic symposium of the Kansas City Federal Reserve, also said RBI has reached an agreement with the government on a new rate-setting panel, the Monetary Policy Committee, which would be announced soon.
Rajan, who has been under pressure from the Government and the industry to further cut rates, said RBI is still in an 'accommodative mode' and would take a decision as per the data on inflation and other macroeconomic factors. "We also have inflation which other people do not have. We have cut the interest rate thrice so far this year and we are still in accommodative mode. We will have a look at data as it comes in and take a view accordingly.
“We have not said we are finished (on cutting rates) and we will take a view as the data allows us to do,” Rajan told a news channel in an interview on the sidelines of Jackson Hole summit. Interestingly, it is the same summit where Rajan had once famously presented a paper that talked about an imminent global financial crisis, which eventually hit the world markets in 2007-08. Rajan was IMF's chief economist when he made that famous 'prediction'.