has said as he emphasised that both growth and price stability are equally important. With inflation on a downward trend, the RBI's Monetary Policy Committee (MPC) has been reducing the benchmark repo rate and has adopted a neutral stance, which also gives the flexibility to either cut or hike the rate going forward. The central bank has cummulatively reduced the repo rate by 100 basis points since February.

In an interview to television channel CNBC-TV18, Malhotra said internal assessments are done on inflation outlook and he does not know whether it will be 3 per cent, as those calculations are still in the process of being done.

"We will certainly come out with our latest projections, and the MPC, as always, will factor in the evolving situation in the outlook, and then take a call as to what kind of policy rate the economy really needs.

"If inflation is lower -- the forecast, therefore the outlook is lower -- or growth is lower, certainly policy rates can be cut, but that is something we have to wait and watch," he said.

According to him, one cannot say that inflation is more important than growth numbers. "As you are aware, we primarily look at price stability -- that is our core mandate, our primary objective -- and then we look at growth also. Both are equally important. I would not say that we give more emphasis as of now to either number," the Governor said. Reserve Bank's rate-setting panel MPC is scheduled to meet early next month.

While acknowledging that rate cut transmission is still in early stages of transmission, Malhotra said he has figures till May.

"In June, we cut by 50 basis points. So, there's a long journey yet, 100 basis points. So as against 100 basis points, it's still, I do not have the figures for June, but till May it was 24 basis points. My sense is that it has improved, but there is still distance for us to cover," he noted.