The Indian markets rallied as investors were hoping to see a cut in interest rates as US Federal Reserve announced they will keep their rate on hold.
Reserve Bank of India Governor, Raghuram Rajan reminded about India’s priority is to keep the inflation low and continue to implement reforms. This according to him would create a sustainable growth model.
He added even though monetary policy can help to strengthen economic recovery, it is only a short term incentive. The key objective according to him is too think about the future chances of economic growth.
Here he made a comparison to Brazil’s policies which favored certain sectors of the market.
India’s consumer inflation in August hit a 3.66 per cent. Even though retail prices have grown around mid-5 per cent.