The Reserve Bank of India’s primary goal is to bring inflation closer to target, but it cannot ignore growth concerns. According to governor Shaktikanta Das in an interview published on Friday in the Economic Times.MUMBAI, May 27 (Reuters)
“We are determined to keep inflation under control. At the same time, we must consider the requirements of growth. It cannot be that the operation was successful but the patient died “Das stated.
“We will need to reduce inflation, and we cannot afford such a large growth shock that will have a negative impact on inflation. It must be a balanced decision, with inflation control as the top priority “He continued.
Consumer price index-based inflation rose more than expected in April to 7.79%. An eight-year high remaining above the Reserve Bank of India’s 2% – 6% tolerance band for the fourth consecutive month.
The RBI governor stated that our primary focus at the moment is to bring inflation closer to the target. Which is set at 4% in the medium term.
Das stated that the next policy action would be determined by the inflation forecast set by the monetary policy committee (MPC) at its June meeting and how it affects the outlook.
Following a 40-basis-point rate increase by the MPC earlier in May. India announced a series of changes to the tax structure levied on critical commodities on Saturday in an effort to protect consumers from rising prices.
Das stated that all of the government’s inflation-control measures. As well as recent geopolitical developments will be factored into the inflation projections.
According to a Reuters poll, India’s economic recovery from the COVID-19 pandemic is likely to stall again at 4% in the January-March quarter.
The decision of the MPC will be announced on June 8 with most economists expecting another rate hike.
Economy growth scenario appears to be far more comfortable and favorable than that of other countries. Inflation must be stabilized or it will spiral out of control.
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