Zee Media bureau/Tanya Ashreena
New Delhi: Emerging markets have different problems from developed markets on inflation, said RBI Governor Raghuram Rajan in a conference call with analysts. He said India was still battling inflation, and the global deflationary environment had a positive reaction.
Rajan said the medium-term view of inflation was more important than short-term view. “Those in term bonds are taking a longer-term view of the country,” he said.
“Lower inflation increases disposable income and propensity to save,” Rajan said. He also said that he suggested the government link inflation bonds to CPI.
The RBI governor said the country has moved from negative to positive real interest rates, and real rates will stay at 1.5 percent to 2 percent for some time.
“We cut rates as public perception was that RBI is late on acting,” Rajan said.
