Business

RBI Governor: Monetary Policy Ought To Remain Actively Disinflationary

On Friday, Reserve Bank Governor Shaktikanta Das emphasized that the monetary policy must be actively disinflationary to ensure that the drop in inflation from its peak of 7.44 percent in July continues smoothly.

In his address to the Kautilya Economic Conclave 2023, he also stated that price stability and financial stability complement each other and that the RBI has worked hard to manage both properly.

Retail inflation fell to a three-month low of 5.02 percent year-on-year in September, thanks to lower vegetables and fuel prices, and was back within the Reserve Bank’s comfort zone.

Consumer Price Index (CPI) inflation was 6.83 percent in August and 7.41 percent in September 2022. In July, inflation reached a high of 7.44 percent.

To combat inflation, the Reserve Bank has raised the main policy rate (repo) by 250 basis points since May 2022. However, it paused the rate hike in February of this year.

“We have maintained a pause on policy rate. So far 250 basis points rate hike is still working through the financial system. We have also appropriately fine-tuned our communication to ensure a successful transmission of the interest rate hikes”, said Shaktikanta Das.

He also stated that the growth of digital payments has made monetary policy transmission more efficient and effective.

Das also emphasized that monetary policy is always difficult and that there is no room for complacency.

In his statement, the Governor stated that the global economy is currently experiencing a slew of concerns including inflation, slowing growth, and threats to financial stability.

“First, no moderation in inflation which is getting interrupted by recurring and overlapping shocks. Second, slowing growth, and that too with fresh and enhanced obstacles. And third, lurking risks of financial stability”, the governor said.

In terms of the local financial sector, he stated that Indian banks would be able to meet minimal capital requirements even in times of crisis.

Das stated that India is prepared to become the new engine of the global economy and that the country is likely to achieve a 6.5 percent GDP growth in the current fiscal year, which ends in March 2024.

Also read: “American Leadership Is What Holds World Together”, Claims Joe Biden, US President

Spriha Rai

Recent Posts

PM Modi Meets Bhutan PM Tobgay At BIMSTEC Summit; Highlights Strong Bilateral Ties & Regional Cooperation

PM Narendra Modi met Bhutanese PM Tshering Tobgay on the sidelines of the 6th BIMSTEC…

5 hours ago

Jamia Students Back Waqf Amendment Bill; Call It A Step Toward Empowerment

The student group 'Shaher-E-Arzoo' expressed firm support for the Waqf Amendment Bill, calling it a…

7 hours ago

India’s Exports To The US Face Limited Impact From Tariff Hike: SBI Report

The 27% tariff hike by US President Donald Trump on Indian goods will have only…

8 hours ago

Waqf Freed From Mafia Control, New Era Of Development Begins For Muslims: MRM

Following the passage of the Waqf Amendment Bill 2024 in both Houses of Parliament, celebrations…

8 hours ago

India’s Forex Reserves Surge To $665.4 Billion; Rupee Strengthens As Trade Deficit Narrows

India’s forex reserves jumped $6.6 billion to a five-month high of $665.4 billion for the…

9 hours ago

Laxmi Singh Leads Gautam Buddha Nagar Police To Historic No 1 Rank In IGRS Across All Stations

Gautam Buddha Nagar Police, led by CP Laxmi Singh, achieved a historic feat with all…

10 hours ago