Reserve Bank Governor Raghuram Rajan today said the US Fed’s move is unlikely to have much bearing on his policy decisions.
“So, that (Fed hiking rates) is not going to be the key factor in determining our monetary policy stance going forward,” the Governor told reporters during the customary post policy meeting.
He said the central bank’s focus is currently on the domestic economy and domestic requirements.
The US Federal Reserve is likely to normalise its monetary policy soon and is expected to increase its interest rates in June or September.
He said the Fed policy changes will have an impact globally but that is not RBI’s central concern.
“When it comes to volatility, the improvement in macro policy, both from the government side and the RBI side as well as the buffer that we have built, gives us is a luxury of being able to focus a little more on the domestic policy and domestic policy requirements rather than what’s going to happen internationally,” Rajan said.
He also said that it is not that the Fed policy change is irrelevant but it is not the central concern.
“I am not too worried about when the Fed will move and how much it will affect our own policy process. It will be one factor but not the most important factor. I doubt that it will be constraining in terms when we move again,” he added.