India Central Bank Sends Conflicting Signals With Surprise Moves
India's central bank under new Governor Sanjay Malhotra is giving market participants conflicting signals about monetary policy as it takes aggressive steps to spur economic growth and lending.
The Reserve Bank of India surprised analysts last week by cutting interest rates more than expected and announcing a cash boost for banks, citing the need to spur growth. Yet, at the same time, it changed the policy stance back to neutral after just one meeting, a relatively hawkish signal on future rate cuts. Malhotra — who has been in the role for six months now — said at the time there's 'very limited space to support growth.'
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