New Delhi : Reserve Bank of India (RBI) Governor Shaktikanta Das said on Thursday that the fight against inflation in India is not over yet. Half of the work is yet to be done to bring inflation back to a comfortable range. He said that the war against the increase in prices will have to continue for now. This work will have to be done in such a way that the inflation figures remain around 4 per cent. At present, the retail inflation rate in India is more than the set target of four per cent.
Half the work is yet to be done to reduce inflation
RBI Governor Shaktikanta Das said in the bi-monthly monetary review meeting held from June 6 to 8 that our work is only half done. However, he also said that the target range of inflation has been brought in the range of four to six per cent. He said that our war against inflation is still going on. Let us tell you that the minutes of the meeting of the Monetary Policy Committee held between June 6 and 8 were published on Thursday.
No change in repo rate for the second time in a row
In the meeting of the RBI Monetary Policy Committee held from June 6 to 8, it was decided to keep the policy interest rate unchanged at 6.5 percent for the second time in a row. Repo rate is the interest rate at which RBI lends to the banks of the country.
Why was there no change in the repo rate
The steady decline in inflation (currently at an 18-month low) and the prospect of further moderation in the coming days have prompted the central bank to put a pause on the key interest rate again. Except for the pause on the repo rate during April, the RBI has increased the repo rate by 250 basis points to 6.5 percent from May 2022 in the fight against inflation. He said that in view of the prevailing uncertainties, it is difficult to make any predictions about the reduction in the repo rate in the coming days.
The decreasing uncertainty in the global economy
The RBI governor said that the global economy has maintained the growth momentum and the overall uncertainty is easing to some extent. Despite this, headwinds remain in the global development landscape. The geopolitical conflict between Ukraine and Russia continues unabated. Headline inflation is on the decline in all countries, but it still remains at a high level and is well above the set targets.
Inflation has come down in India
He said inflation in India has come down and the external sector outlook has improved, while balance sheets of banks and corporates look resilient and healthy. India’s retail inflation was above the RBI’s six per cent target for three consecutive quarters and in November 2022 itself, the RBI was able to bring down inflation.