Reserve Bank of India Governor Raghuram Rajan met Finance Minister Arun Jaitley here on Tuesday ahead of the central bank's monetary policy review on September 29.Following what is normally a customary meeting before the policy review, Rajan told reporters only that he had a "cordial" conversation with the finance minister.Jaitley had on Sunday said monetary policy plays an important role in economic growth and hoped the RBI would act appropriately with a sense of responsibility in this regard."RBI historically has been a very responsible institution. Now, as somebody who wants India's economy to grow and who wants domestic demand to grow, I will want the rates to come down," Jaitley told media persons in Hong Kong."But then, having entrusted RBI with this responsibility, I am sure they are certainly very well informed of the developments taking place within and outside the country. RBI will appropriately act with a sense of responsibility," he said.
The RBI has cut the interest rate by 0.75 percent this year, to its current level of 7.25 percent in three tranches, two of which came unscheduled.Last week, Minister of State for Finance Jayant Sinha said there is a favourable environment for the RBI to cut interest rates.On Friday, Rajan had said the RBI would focus on keeping the interest rates low in the near-term as well as in the future."While the monetary policy will be accommodative, there is room to expand sustainable growth potential. By continuing with reforms that the government and regulators have announced, a sustainable growth potential can be achieved," he said while delivering the 4th C.K. Prahalad Memorial Lecture in Mumbai.