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The Finance Minister, Mr Pranab Mukherjee, has welcomed the RBI move to change its policy stance from monetary tightening to a pause and keeping its policy rates unchanged at the latest mid-quarter monetary policy review.
This could help regain growth momentum with improved macro-economic parameters in remaining period of current fiscal, Mr Mukherjee told reporters outside Parliament soon after the RBI's mid quarter policy announcement.
The central bank had in succession raised policy rates 13 times since March 2010 to tame overall inflation.
The Finance Minister also welcomed the RBI Governor, Dr D. Subbarao's resolve to check speculative intervention in foreign exchange market which among other factors has contributed to the sharp slide in rupee against the dollar.
Mr Mukherjee also expressed confidence that overall inflation would moderate in the coming weeks. He also pointed out that there has been an appreciable decline in food inflation in November. The Finance Minister, however, expressed concern that inflation in manufacturing goods remain firm at 7.7 per cent.
"There is need to improve business sentiment and regain growth momentum," he said.
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