Don't Get carried Away By Some Dips In Inflation: RBI Governor

Reiterating the importance of staying the course, the Reserve Bank of India Shaktikanta Das has urged the policymakers to stay resolute despite the ease registered in inflation in the rapidly growing economy. The apex bank Governor has stated to not get carried away by some dips in inflation.

Speaking at a forum by The Bretton Woods Committee in Singapore, the central bank Governor said that he is in no rush regarding the relaxation in policy measures. “Inflation has been brought within the target band of 2 to 6 per cent, but our target is 4 per cent. Over the last several monetary policy meetings, we have been reiterating the importance to stay the course and not get carried away by some dips in inflation,” said Das

In August 2024, the country’s retail inflation increased to 3.65 per cent from 3.54 per cent in the previous month. There has been lots of debate regarding food inflation which makes up around half of the consumer price index (CPI) basket. The food inflation rose to 5.66 per cent after being 5.42 per cent in July.

The RBI Governor stated that the inflation which eased in the last months was due to the favourable base effect. However, the boss of the apex bank stated that this could reverse in the coming quarters while the country is expected to reap the benefits from the base effect in the third quarter, this is likely to fade away in the fourth quarter.

The RBI aims to bring the headline inflation down to 4 per cent on a durable basis after it has remained within the tolerance range of 2 to 6 per cent. The Governor pointed out that the country is one of the world’s fastest-growing economies and has the potential to witness growth that is above 7.5 per cent.

The Governor has urged the global monetary authorities to not be too flexible as inflation has stabilised in many parts of the world. He urged them to remain cautious and adaptable.