Inflation in India: There is no relief from inflation yet, RBI gave a big warning.
RBI Governor Shaktikanta Das has said that inflation will remain above the target set by the central bank at 6 percent till December 2022.
However, after that, it is expected to fall below 6 percent. In an interview, Das said, “Inflation is certainly the biggest challenge facing most countries.
Almost all economies are facing rising inflation. This is a problem that has worried governments and central banks around the world.
As far as the country’s inflation is concerned, external reasons are most responsible behind it.
Since April, we have been working to effectively tackle rising inflation.
When the RBI Governor was asked why he did not increase the policy rates earlier to check inflation, he said that the steps taken in silence do not make headlines in the newspapers.
According to the monetary policy announced earlier this month, consumer price index (CPI)-based retail inflation is estimated to be 7.5 percent in the first quarter of the current fiscal.
It is estimated to be 7.4 percent in the second quarter and 6.2 percent in the third quarter.
Inflation is expected to fall within the RBI’s target in the fourth quarter of 2022-23. Inflation is estimated at 5.8 percent for the fourth quarter of the current fiscal.
CPI-based inflation declined to 7.04 percent in May from an eight-year high of 7.79 percent in the previous month. Inflation has remained above the RBI target since the beginning of this year.
RBI will not allow sharp fluctuations in the rupee.
RBI Deputy Governor Michael Debabrata Patra on Friday said the central bank is working to contain volatility in the rupee and will not allow sharp volatility in it.
However, he also clarified that RBI is not in favor of fixing any level of Rs. Patra, the head of RBI’s monetary policy department, stressed that the Indian currency has seen the least devaluation in recent times.
Addressing an event organized by the PHD Chamber of Commerce, he said, “We do not know what will be the level of the rupee.
In fact, even the US Federal Reserve does not know what the dollar level will be. However, one thing is certain we will always stand for its stability and will not allow sharp fluctuations at any cost.
Patra further said that if one talks about the devaluation of the rupee, then it is the lowest in the world and it is the strength of the foreign exchange reserves of 600 billion dollars.
Responding to a question on the rupee-ruble payment system, Patra said that whatever the government decides, the Reserve Bank will abide by it.