RBI governor Shaktikanta Das on Monday said the central bank was ahead of the curve in expecting a slowdown which had prompted it to cut rates multiple times from as early as February even as he said he was baffled by the surprise expressed by market participants over its decision to put a pause on rate cuts at the meeting of its monetary policy committee (MPC) earlier this month.

Since February, the MPC has reduced the policy repo rate by 135 basis points to 5.15 per cent. However, amid firm inflation, which went past its medium-term target of four per cent, and upward risk to prices in the future, the MPC had retained the repo rate.

“Both the government and RBI have acted on time. We have acted a little bit ahead of time in terms of reducing our policy rates. As early as February this year, the RBI saw that there was a growth slowdown, we saw that a momentum for slowdown was building up, so we started cutting rates this year,” Das said at a business conclave in Delhi.

Back in February, Das said, the markets were surprised with the RBI’s call to cut rates and wondered why they are now also surprised with the pause call.

Fact check

Das’s claim of predicting the slowdown in February does not square with the facts. The RBI had forecast growth rates above 7 per cent for the fiscal thrice this year — 7.4 per cent in February, 7.2 per cent in April and 7 per cent in June. Even in August it had forecast growth which was a tad lower at 6.9 per cent. Only in December it had forecast a low growth of 5 per cent.